Can digital tax enforcement reduce the risk of corporate debt default?

Wanyi Chen and Jingyu Xu

Economic Analysis and Policy, 2024, vol. 83, issue C, 1041-1060

Abstract: The development of technology has led to the widespread use of digital technology in tax enforcement. Using the Chinese digital tax enforcement reform as a quasi-natural experiment, this study shows that digital tax enforcement reduces the risk of debt default by improving accounting information quality and reducing agency costs. Further analysis shows that this impact is more significant in enterprises with poorer external information environments, lower internal control quality, lower customer concentration, and lower digitalization levels. This study enriches the research on the economic consequences of digital tax enforcement. This has practical implications for the government when using information technology to strengthen tax administration.

Keywords: Digital tax enforcement; Corporate debt default; Accounting information quality (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:83:y:2024:i:c:p:1041-1060

DOI: 10.1016/j.eap.2024.08.010

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