Multiple Large Shareholders, Investment Efficiency and Corporate Tax Avoidance: Evidence from China
Multiple Large Shareholders, Investment Efficiency and Corporate Tax Avoidance: Evidence from China
Author(s): Xiaohong Yu, Maonan Chen, Yujun YeSubject(s): Economy, Business Economy / Management, Financial Markets, Public Finances, Accounting - Business Administration, Business Ethics, Socio-Economic Research
Published by: Vysoká škola ekonomická v Praze
Keywords: Corporate tax avoidance; multiple large shareholders; corporate governance; mediating effect analysis
Summary/Abstract: This study assesses the relationship between the ownership structure and corporate tax avoidance based on annual financial data of Chinese A-share listed firms during 2010–2020. Firstly,the empirical results demonstrate that when a listed firm has multiple large shareholders (MLS),these shareholders are likely to weaken internal monitoring and collude with each other, whichwill lower its corporate governance level and increase its corporate tax avoidance (CTA) level.The empirical conclusion remains valid after multiple robustness tests. Secondly, the empiricalresult of the baseline model is significantly influenced by the nature of ownership, the qualityof external audit, the tracking of securities analysts and the firm’s location. Finally, the resultof our mediating effect analysis shows that the presence of MLS reduces the company investmentefficiency, which provokes firms to make aggressive financial choices to obtain resourcesto ensure their future development.
Journal: Prague Economic Papers
- Issue Year: 33/2024
- Issue No: 1
- Page Range: 103-136
- Page Count: 34
- Language: English
