Tax avoidance and state ownership — The case of Sweden

Axel Hilling, Frederik Lundtofte, Niklas Sandell, Amanda Sonnerfeldt and Anders Vilhelmsson
Authors registered in the RePEc Author Service: Anders Wilhelmsson

Economics Letters, 2021, vol. 208, issue C

Abstract: We propose a simple theoretical model for how a company with both private and state shareholders decides on its optimal tax policy. The model predicts that even in the absence of state shareholding, a company will not always pick a tax policy that minimizes taxes. Conversely, majority state ownership will generally not result in zero tax avoidance. Using panel regressions on the entire population of state-owned as well as publicly listed Swedish companies from 2000–2019, we find that a one standard deviation increase in state ownership increases corporate tax payments by around 14%.

Keywords: Tax avoidance; Ownership structure; State ownership (search for similar items in EconPapers)
JEL-codes: G32 H26 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:208:y:2021:i:c:s0165176521003402

DOI: 10.1016/j.econlet.2021.110063

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