Competition and Corporate Tax Avoidance
Evidence from Chinese Industrial Firms
Bibliographic Data
| ID | 9710671 |
|---|---|
| Authors | Hongbin Cai (Peking University), Qiao Liu (0000-0003-0007-7190, University of Hong Kong) |
| Year | 2009 |
| Volume | 119 |
| Issue | 537 |
| Pages | 764-795 |
| Publication date | 2009-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2009.02217.x |
| OpenAlex | W1990966575 |
| Language | EN |
| Citations received | 98 |
| References cited | 22 |
This article investigates whether market competition enhances the incentives of Chinese industrial firms to avoid corporate income tax. We estimate the effects of competition on the relationship between firms' reported accounting profits and their imputed profits based on the national income account. To cope with measurement errors and potential endogeneity, we use instrumental variables, exogenous policy shocks and other robustness analysis. We find robust and consistent evidence that firms in more competitive environments engage in more tax avoidance activities. Moreover, all else equal, firms in relatively disadvantageous positions demonstrate stronger incentives to avoid corporate income tax. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009
Beijing · Business · China · Competition (biology · Corporate Tax · Economic history · Economics · Management · Political science · Tax avoidance · Tax reform · Accounting · Corporate Finance and Governance · Corporate Taxation and Avoidance · Law · Taxation and Compliance Studies
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Equity or efficiency
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The Razor's Edge
Testing Identifiability and Specification in Instrumental Variable Models
Testing for Weak Instruments in Linear IV Regression
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No Razor's Edge
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No Razor's Edge
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| Unique citing works | 98 |
|---|---|
| Citations per year | 2,09 |
| Citation span | 1979 - 2027 (49) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 95 |