Performance shortfall, institutional logic and firms’ tax avoidance

Xi Zhong (), Liuyang Ren () and Ge Ren ()
Additional contact information
Xi Zhong: Guangdong University of Technology
Liuyang Ren: Guangdong University of Foreign Studies
Ge Ren: South China University of Technology

Eurasian Business Review, 2023, vol. 13, issue 4, No 5, 855-886

Abstract: Abstract Based on the special background of transition economies, in which governments play a particularly important role in firms’ survival and development, we discuss the impact of performance shortfall on firms’ tax avoidance, which is a behavior that is considered unethical and irresponsible by the public. Drawing upon performance feedback theory and institutional theory, we propose that performance shortfall will drive firms to reduce tax avoidance to enhance their political legitimacy, thereby gaining more government support to solve current performance problems. We also argue that the relationship between performance shortfall and firms’ tax avoidance is likely nuanced and may vary by institutional logics (e.g., state-owned enterprises (SOEs)), and regional marketization degree). Specifically, we argue that SOEs will strengthen the above-mentioned relationship, and the regional marketization degree will weaken the above-mentioned relationship. After testing listed companies in China as the research object, we find that most of our theoretical views are supported by empirical evidence.

Keywords: Performance shortfall; Tax avoidance; Institutional logic; State-owned enterprises; Regional marketization (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40821-023-00242-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:eurasi:v:13:y:2023:i:4:d:10.1007_s40821-023-00242-7

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40821

DOI: 10.1007/s40821-023-00242-7

Access Statistics for this article

Eurasian Business Review is currently edited by Marco Vivarelli

More articles in Eurasian Business Review from Springer, Eurasia Business and Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().