Competition and tax avoidance: Evidence from quasi natural experiment of the implementation of Anti-Trust Law
Yuan Gao,
Jianjun Li and
Yaping Wu
International Review of Economics & Finance, 2025, vol. 98, issue C
Abstract:
This paper examines the impact of product market competition on corporate tax avoidance by constructing a difference-in-differences model using a quasi-natural experiment of the Anti-Trust Law. The results indicate that the implementation of the Anti-Trust Law significantly increases the degree of tax avoidance of monopolistic firms by more than 0.01 compared to competitive firms. The main conclusion still holds after a series of robustness tests. Declining corporate performance, increased business risk and subjective dissatisfaction towards regulatory authorities constitute the main reasons. Heterogeneity analysis reveals that the promotion effect of the Anti-Trust Law on corporate tax avoidance is more pronounced for firms located in regions with lower levels of tax administration, firms whose income tax is collected and administered by local tax bureaus, firms with lower quality of information disclosure and private firms. The results provide empirical evidence of the differentiated impact of the Anti-Trust Law on corporate tax avoidance behavior of different firms.
Keywords: Competition; Tax avoidance; Anti-trust law (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056025000632
Full text for ScienceDirect subscribers only
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:eee:reveco:v:98:y:2025:i:c:s1059056025000632
DOI: 10.1016/j.iref.2025.103900
Access Statistics for this article
International Review of Economics & Finance is currently edited by H. Beladi and C. Chen
More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().