The effect of shareholder pressure on stakeholder interests: Evidence from corporate tax avoidance

Jiaoliang Jiang, Hengmiao Bao and Shijie Yang

International Journal of Finance & Economics, 2025, vol. 30, issue 3, 2492-2513

Abstract: Research on how shareholder pressure influences the interests of stakeholders has recently witnessed a sharp increase, but yields mixed findings. We revisit this question by investigating the impact of managers' attempts to meet or beat earnings expectations on corporate tax avoidance. Using a sample of Chinese listed firms during 2005–2022, we find that firms with earnings pressure are more tax‐aggressive. Furthermore, such a higher level of tax avoidance due to earnings pressure is associated with higher real activity management. Cross‐sectional analysis shows that the effect of earnings pressure on tax avoidance is weaker among firms with better environment, society, and governance performance, but becomes more salient for state‐owned enterprises, firms with higher financial constraints, and during periods when local officials are devoid of incentives for career advancement. Taken together, our study sheds light on the consequences of shareholder pressure stemming from capital markets on corporate tax policies, and provides implications for enterprises and policymakers concerning taxation in emerging markets.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/ijfe.3026

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:wly:ijfiec:v:30:y:2025:i:3:p:2492-2513

Ordering information: This journal article can be ordered from
http://jws-edcv.wile ... PRINT_ISSN=1076-9307

Access Statistics for this article

International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley

More articles in International Journal of Finance & Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().