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Institutional environment, inside ownership and effective tax rate

Institutional environment, inside ownership and effective tax rate Purpose – The purpose of this paper is to examine the effect of institutional environment and inside ownership on the tax reporting practices of Chinese listed firms. Design/methodology/approach – It is an empirical study using a sample of Chinese listed firms for eight years of time periods between 1998 and 2005. Findings – This study finds that in Chinese provinces with more developed institutions, firms have higher effective tax rates; however, firms with inside ownership in these regions have lower effective tax rates. Further analysis shows that the above results hold only for non‐state‐owned firms. Originality/value – The paper presents the first study of the impact of inside ownership and institutional environment on corporate effective tax rate in China. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Nankai Business Review International Emerald Publishing

Institutional environment, inside ownership and effective tax rate

Tao Zeng
Nankai Business Review International , Volume 2 (4): 10 – Oct 4, 2011
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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
2040-8749
DOI
10.1108/20408741111178799
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine the effect of institutional environment and inside ownership on the tax reporting practices of Chinese listed firms. Design/methodology/approach – It is an empirical study using a sample of Chinese listed firms for eight years of time periods between 1998 and 2005. Findings – This study finds that in Chinese provinces with more developed institutions, firms have higher effective tax rates; however, firms with inside ownership in these regions have lower effective tax rates. Further analysis shows that the above results hold only for non‐state‐owned firms. Originality/value – The paper presents the first study of the impact of inside ownership and institutional environment on corporate effective tax rate in China.

Journal

Nankai Business Review International – Emerald Publishing

Published: Oct 4, 2011

Keywords: China; Corporate taxation; Public ownership; Private ownership; Institutional environment; Marketization index; Inside ownership; State‐owned firms; Chinese listed firms; Effective tax rate

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