Tax reduction incentive and corporate financialization

Jingzheng Wang and Xiaoli Qin

Finance Research Letters, 2024, vol. 62, issue PB

Abstract: This paper investigates the influence of tax reduction incentives on firms' financialization based on the data from A-share listed companies spanning 2010 to 2022. The findings indicate that tax reduction incentives can effectively hinder firms' financialization. Furthermore, the mechanism test reveals that the reduction of financing constraints and the rise in fixed asset investments play a crucial intermediary role. Considering the diverse nature of company property rights and advanced technology, the analysis suggests that the impact of tax reduction incentives on the financialization of enterprises is more pronounced in private and conventional technology enterprises.

Keywords: Tax reduction incentive; Corporate financialization; Financing constraints; Fixed asset investments (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:62:y:2024:i:pb:s1544612324002381

DOI: 10.1016/j.frl.2024.105208

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