Long live the walking dead? Corporate tax avoidance and zombie firms in China

IF 5.5 3区管理学 Q1 BUSINESS, FINANCE

British Accounting Review Pub Date : 2024-05-01 DOI:10.1016/j.bar.2024.101319

Changrong Wang , Grant Richardson , Yanming Cao

{"title":"Long live the walking dead? Corporate tax avoidance and zombie firms in China","authors":"Changrong Wang , Grant Richardson , Yanming Cao","doi":"10.1016/j.bar.2024.101319","DOIUrl":null,"url":null,"abstract":"<div><p>This study examines the impact of corporate tax avoidance on zombie firms in China. Using a sample of 17,717 firm-year observations over the 2010–2019 period, we find a negative and statistically significant association between tax avoidance and zombie firms after controlling for financial constraints. We also divide the zombie firms in our sample into state-owned enterprise (SOE) and non-SOE subsamples and observe that the tax avoidance effect is stronger in the SOE subsample. Our baseline results are robust to endogeneity concerns and alternative measures of zombie firms, tax avoidance, and financial constraints. Moreover, we perform a heterogeneity test to understand better the impact of CEO political connections on the negative association between corporate tax avoidance and zombie firms. We find that CEO political connections magnify this association. Finally, we identify information opacity as a mechanism that explains the negative association between tax avoidance and zombie firms. Overall, the findings of this study improve our understanding of the determinants of zombie firms and the consequences of corporate tax avoidance.</p></div>","PeriodicalId":47996,"journal":{"name":"British Accounting Review","volume":"56 3","pages":"Article 101319"},"PeriodicalIF":5.5000,"publicationDate":"2024-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S0890838924000192/pdfft?md5=5a26e87220aa1574f4060653ed549666&pid=1-s2.0-S0890838924000192-main.pdf","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"British Accounting Review","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0890838924000192","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

This study examines the impact of corporate tax avoidance on zombie firms in China. Using a sample of 17,717 firm-year observations over the 2010–2019 period, we find a negative and statistically significant association between tax avoidance and zombie firms after controlling for financial constraints. We also divide the zombie firms in our sample into state-owned enterprise (SOE) and non-SOE subsamples and observe that the tax avoidance effect is stronger in the SOE subsample. Our baseline results are robust to endogeneity concerns and alternative measures of zombie firms, tax avoidance, and financial constraints. Moreover, we perform a heterogeneity test to understand better the impact of CEO political connections on the negative association between corporate tax avoidance and zombie firms. We find that CEO political connections magnify this association. Finally, we identify information opacity as a mechanism that explains the negative association between tax avoidance and zombie firms. Overall, the findings of this study improve our understanding of the determinants of zombie firms and the consequences of corporate tax avoidance.

查看原文本刊更多论文

行尸走肉万岁？中国的企业避税和僵尸企业

本研究探讨了企业避税对中国僵尸企业的影响。我们使用 2010-2019 年间 17717 个企业年观测样本，在控制财务约束后，发现避税与僵尸企业之间存在负相关，且在统计上显著。我们还将样本中的僵尸企业分为国有企业子样本和非国有企业子样本，并观察到国有企业子样本的避税效应更强。我们的基线结果对内生性问题以及僵尸企业、避税和财务约束的其他衡量标准都是稳健的。此外，我们还进行了异质性检验，以更好地理解首席执行官的政治关系对企业避税和僵尸企业之间负相关的影响。我们发现，首席执行官的政治关系放大了这种关联。最后，我们发现信息不透明是解释避税与僵尸企业之间负相关关系的一个机制。总之，本研究的结论加深了我们对僵尸企业的决定因素和企业避税后果的理解。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

British Accounting Review BUSINESS, FINANCE-

CiteScore

8.60

自引率

3.90%

发文量

审稿时长

76 days

期刊介绍： The British Accounting Review*is pleased to publish original scholarly papers across the whole spectrum of accounting and finance. The journal is eclectic and pluralistic and contributions are welcomed across a wide range of research methodologies (e.g. analytical, archival, experimental, survey and qualitative case methods) and topics (e.g. financial accounting, management accounting, finance and financial management, auditing, public sector accounting, social and environmental accounting; accounting education and accounting history), evidence from UK and non-UK sources are equally acceptable.