Will Corporate Tax Avoidance Lead to Forced Executives Turnover?
- 1 School of Management, Jinan University, Guangzhou, China
Abstract
Based on the data of A-share listed companies in 2004-2018, this paper discusses the possible economic consequences of corporate tax avoidance from the individual level of executives. In this paper, the degree of corporate tax avoidance is divided into aggressive tax avoidance behavior and passive tax avoidance behavior, respectively, to study the impact of different degrees of tax avoidance on executives forced to be replaced by listed companies. It is found that both aggressive tax avoidance and passive tax avoidance will lead to forced executives turnover. In addition, this paper also examines the moderation effects of the nature of property rights, the performance of corporate social responsibility and market concentration on the above-mentioned research, and finds that private companies, companies that perform social responsibility well and companies in areas with fierce market competition, the passive tax avoidance behavior has a greater impact on executives forced turnover.
- Chen, K. P., & Chu, C. Y. C. (2005). Internal Control versus External Manipulation: A Model of Corporate Income Tax Evasion. The RAND Journal of Economics, 36, 151-164.
- Desai, M. A. & Dharmapala, D. (2005). Corporate Tax Avoidance and High-Powered Incentives. Journal of Financial Economics, 79, Article No. 11241. https://doi.org/10.3386/w11241
- Gallemore, J., Maydew, E. L., & Thornock, J. R. (2014). The Reputational Costs of Tax Avoidance. Contemporary Accounting Research, 31, 1103-1133. https://doi.org/10.1111/1911-3846.12055
- Graham, J. R., Hanlon, M., Shevlin, T., & Shroff, N. (2017). Tax Rates and Corporate Decision-Making. Review of Financial Studies, 30, 3128-3175. https://doi.org/10.1093/rfs/hhx037
- Hanlon, M., & Heitzman, S. (2010) A Review of Tax Research. Journal of Accounting and Economics, 50, 127-178. https://doi.org/10.1016/j.jacceco.2010.09.002
- Liu, H., & Lv, C. J. (2018). Strategic Effect of Tax Avoidance: The Causal Impact of Tax Avoidance on Firms’ Product Market Performance. Journal of Financial Research, 7, 158-173.
- Wang, D. Z., & Luo, M. L. (2017). Tax Avoidance, Social Responsibility Commitment and Firm Value. Communication of Finance and Accounting, 15, 31-35+12.
- Wilson, R. J. (2009). An Examination of Corporate Tax Shelter Participants. The Accounting Review, 84, 969-999. https://doi.org/10.2308/accr.2009.84.3.969
- Ye, K. T. & Liu, H. (2014). Corporate Tax Avoidance and Internal Agency Costs. Journal of Financial Research, 9, 158-176.
- Zhang, M. H., Zhang, H. F., & Zhang, R. (2018). The Heterogeneous Influence of Financing Constraints on Tax Avoidance Behavior of Enterprises: Evidence from Listed Companies. Tax Research, 1, 93-99.