How big data tax governance reduces excessive deposits and loans? Evidence from Chinese listed firms

Mengping Liu, Wenjie Zhang and Yanyan Kuang

Review of Accounting and Finance, 2026, vol. 25, issue 3, 344-363

Abstract: PurposeThe prevalence of excessive deposits and loans in corporations signals potential financial misconduct and poses systemic risks. This study aims to investigate how a technology-driven tax administration reform can serve as an external governance mechanism to mitigate this issue. The authors argue that by enhancing transaction-level transparency, such digital infrastructures can curb firms’ ability to maintain opaque and risky financial structures.Design/methodology/approachThis paper develops a multiperiod difference-in-differences model grounded on the quasi-natural experiment of Golden Tax Project III (GTP III). In addition, controls the year-fixed effect and industry-fixed effect, clustering at the firm level. This model is used to gauge the influence of big data tax governance on enterprises’ excessive deposits and loans.FindingsUsing a difference-in-differences model on Chinese A-share firms from 2010 to 2021, the authors find that the staggered implementation of China’s “Golden Tax Project III” (GTP III) significantly reduces the likelihood of a firm exhibiting an excessive deposits and loans structure. The authors identify reduced agency costs, enhanced information transparency and decreased tax avoidance as the key underlying mechanisms.Practical implicationsThe findings offer a blueprint for global policymakers, regulators and investors. The authors propose that similar digital tax audit infrastructures can be leveraged as an early-warning system to detect financial irregularities and liquidity risks, thereby improving market stability and corporate oversight beyond the confines of tax collection.Originality/valueTo the best of the authors’ knowledge, this study is the first to conceptualize GTP III as an exogenous, large-scale shock to corporate opacity and to document that a state-operated, data-rich tax infrastructure can directly reduce the prevalence of excessive deposits and loans.

Keywords: Golden Tax Project III; Big data tax; Excessive deposits and loans; Enterprise management (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/raf/article/25/3/344/13425 ... ce-reduces-excessive (text/html)
https://www.emerald.com/raf/article-pdf/25/3/344/11244249/raf-09-2025-0360en.pdf (application/pdf)

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:eme:rafpps:raf-09-2025-0360

DOI: 10.1108/RAF-09-2025-0360

Access Statistics for this article

Review of Accounting and Finance is currently edited by Nawazish Mirza

More articles in Review of Accounting and Finance from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().