Does More Managerial Power Impede or Promote Corporate Tax Avoidance? Evidence from Listed Chinese Companies
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
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Detail(s)
Original language | English |
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Article number | 1914 |
Journal / Publication | Sustainability |
Volume | 11 |
Issue number | 7 |
Online published | 30 Mar 2019 |
Publication status | Published - Apr 2019 |
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DOI | DOI |
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Attachment(s) | Documents
Publisher's Copyright Statement
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Link to Scopus | https://www.scopus.com/record/display.uri?eid=2-s2.0-85064071752&origin=recordpage |
Permanent Link | https://scholars.cityu.edu.hk/en/publications/publication(c96aab9d-2efc-4bfa-9c4b-22103963228c).html |
Abstract
Paying taxes is a form of corporate social responsibility. Corporate tax avoidance effectively reduces operating costs, thereby increasing shareholder returns, but the pros and cons are different for executives. This paper takes data from companies listed in China from 2000 to 2016 to explore the causal relationship between managerial power and corporate tax avoidance, using principal component analysis and entropy weight methodology to construct managerial power. First, we conduct an ordinary least square regression, and then we employ alternative measures to avoid taxation, and use managerial power as a robustness check. Next, we rerun the model by using quantile regression and propensity score matching. Finally, in order to tackle problems with endogeneity, we carry out regressions utilizing instrumental variables and simultaneous regression equations. We conclude that managerial power reduces corporate tax avoidance, and firms with more managerial power have fewer incentives to avoid taxes. The results of this paper can guide the taxation of companies listed on the Chinese market to achieve the full payment of tax obligations by reinforcing managerial power in companies, which improves national taxation and leads to sustained economic growth.
Research Area(s)
- Instrument variable, Managerial power, Propensity score matching, Tax avoidance
Citation Format(s)
Does More Managerial Power Impede or Promote Corporate Tax Avoidance? Evidence from Listed Chinese Companies. / Tang, Yingkai; Liu, Yao; Liu, Jing et al.
In: Sustainability, Vol. 11, No. 7, 1914, 04.2019.
In: Sustainability, Vol. 11, No. 7, 1914, 04.2019.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
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