Government Intervention, Institutional Environment, and Tax Avoidance: Evidence from China

HONGYAN, SUN and XU, ZHANG (2015) Government Intervention, Institutional Environment, and Tax Avoidance: Evidence from China. In: International Conference on Advances in Economics, Social Science and Human Behaviour Study - ESSHBS 2015, 21 - 22 February 2015, Hotel Lebua at State Tower.

20150310_052527.pdf - Published Version

Download (592kB) | Preview
Official URL:


This paper analyzes the effect of government intervention on firms’ tax avoidance behaviors. Using Chinese data, we test this relation by measuring government intervention at three levels. First, we compare tax avoidance behavior between state-owned enterprises (SOEs) and non- state-owned enterprises (non-SOEs) and find that the sensitivity of tax avoidance is significantly stronger for SOEs. Second, we measure government intervention by two province-level National Economic Research Institute (NERI) index and discover that firms in regions with low level of marketization which means more government interventions are more likely to pursue tax avoidance. Third, we draw a sub-sample and divide all SOEs into central SOEs and local SOEs, and it seems that the former are more tax aggressive than the latter. Overall, tax avoidance patterns can probably be explained by the degree of government intervention, that is, more government intervention through no matter state ownership or institutional environment will lead to more tax avoidance.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: government intervention, SOEs, institutioanal environment, tax avoidance
Depositing User: Mr. John Steve
Date Deposited: 09 May 2019 11:03
Last Modified: 09 May 2019 11:03

Actions (login required)

View Item View Item