Mixed-ownership structure, non-state-blockholder coalition, and tax avoidance

Wenbin Long, Huiying Wu, Lidan Li, Sammy Xiaoyan Ying and Sihai Li

International Review of Financial Analysis, 2024, vol. 91, issue C

Abstract: This study examines the relationship between a coalition of non-state blockholders and corporate tax avoidance in a context in which state and non-state ownership coexist and the ownership structure is concentrated. Our results show that the dominance of non-state blockholders is positively associated with corporate tax avoidance and that the relationship is weakened by the state being the ultimate controller. Further analyses show that the relationship between non-state blockholder dominance and tax avoidance is weakened by the increased number of and greater heterogeneity among non-state blockholders. Moreover, the moderating effect of the state as the ultimate controller is more pronounced when there are fewer layers in the pyramidal state-shareholding structure and when the local government is the ultimate controller. In addition, we find that a tightening of regional tax enforcement efforts and the implementation of a 2007 tax reform weaken this relationship. Altogether, our results suggest that the collective power of non-state blockholder coalitions and the control strength of the state ultimate controller interact to influence corporate tax strategies.

Keywords: Tax avoidance; Ownership structure; Blockholder coalition; Ultimate controller (search for similar items in EconPapers)
JEL-codes: G32 H26 M49 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:91:y:2024:i:c:s1057521923005045

DOI: 10.1016/j.irfa.2023.102988

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