 Ownership structure and corporate tax avoidance: Evidence from publicly listed private firms in ChinaGrant Richardson, Bei Wang and Xinmin Zhang Journal of Contemporary Accounting and Economics, 2016, vol. 12, issue 2, 141-158 Abstract: This study examines the association between ownership structure and corporate tax avoidance in publicly-listed private firms in China. We find a significant non-linear association between ownership concentration and tax avoidance that exhibits an inverted U-shaped pattern. At a lower level, increased ownership concentration is positively associated with tax avoidance due to the entrenchment effect. However, beyond the minimum level necessary for effective control, concentrated ownership through voting rights is negatively associated with tax avoidance because of the alignment effect. We also find a significantly positive association between pyramidal ownership structure and tax avoidance due to the entrenchment effect. When voting rights and cash-flow rights diverge, a lower level of cash-flow rights fails to offer the controlling owner incentive alignment sufficient to reduce the entrenchment effect and tax avoidance. Keywords: Ownership structure; Private firms; Corporate tax avoidance; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:12:y:2016:i:2:p:141-158 DOI: 10.1016/j.jcae.2016.06.003 Access Statistics for this article Journal of Contemporary Accounting and Economics is currently edited by Agnes C.S. Cheng, P. Clarkson, F.A. Gul, Zoltan Matolcsy, Dan Simunic and Ben Srinidhi More articles in Journal of Contemporary Accounting and Economics from Elsevier |
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