Chief Financial Officers’ Power, Institutional Environment, and Corporate Effective Tax Rate: Evidence from China

Danlin Pu, Yun Hong and Ming-Hsien Hsueh

Emerging Markets Finance and Trade, 2015, vol. 51, issue S1, S196-S213

Abstract: In this study, we investigate how chief financial officers’ (CFOs’) power and institutional environment influence corporate effective tax rates (ETRs). Using a sample of Chinese listed firms from 2004 to 2010, we find that firms with expert power or political power CFOs enjoy a low effective tax rate. Furthermore, CFOs’ expert power plays a more important function in reducing ETR in regions with a better institutional environment compared to those with less-developed institutions. CFOs’ political power is the most important factor in reducing ETR in regions with a less developed institutional environment than in those regions with a better institutional environment.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:51:y:2015:i:s1:p:s196-s213

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DOI: 10.1080/1540496X.2014.998905

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