Study On Executives And Corporate Tax Avoidance

Tax avoidance is the important part of tax research, that was researched first in1970's. But the early literature on the tax avoidance mostly on evasion by individuals, not businesses. For closely-held small businesses whose owners are also managers, if the dollar of tax saving is greater than the utility cost of a big penalty, holding constant the chance of getting caught and the penalty for noncompliance. This moment the businesses is the as same as individual taxpapers. The additional issues arise in widely held corporations tax avoidance research because of the principal-agent setting with the development of modern enterprise system and the separation of ownership and control. This moment, the effect of managers on corporate tax avoidance become the focus of research areas. However It is regrettable that little existing literature focus on corporate tax avoidance with the separation of ownership and control in our country. At the same time, the fact that a large proportion of listed companies in our country is state holding companies in our courty is very different with existing research. This condition cause that the existion research is not applicable to corporatation in China, and promote scholars make a research on corporate tax avoidance deeply based on Chinese firms'governance conditions.This dissertation make the research under the analysis framework of principal-agent and use the data about Listed Companies in China. Firstly, this dissertation analysis the effect of managers'compensation incentives on the corporate tax ovidance activities based on the firms'ownership type in our country. Sencondly, this dissertation makes a research on the association between the executive heterogeneity and corporate tax avoidance. Lastly, this dissertation make a empirical research on the effect of tax enforcement of authority on corporate tax avoidance activities.The main conclusions of this dissertation contain: (1) The positive association between compensation and tax avoidance will changed in state holding companies. The positive effect of managers'comepensation is more significant in non-state-holding companies than state holding companies. The managers' comepensation can't make firms engage more tax avoidance in state holding companies, because the cost of tax avoidance, such as reputation, career, is more serious for managers of state holding companies.(2) Managers heterogeneity affect significantly corporate tax avoidance. Managers are not fully rational, and the decisions of corporate made by managers involve more than a cost-benefit calculation, and reflect managers'intrinsic characteristics. Specifically, the management styles and the executive's tenure have a significant effect on corporate tax avoidance, and the effect of age, sex, education etc. is not significant.(3) The deterrence of tax enforcement in our country on corporate managers'tax avoidance decisions. Firstly, higher tax enforcement of authority can reduce the impact of compensation on tax avoidance activities, and the inhibition effect is more significant in non-state-holding firms. Secondly, the significance of managers'individual effect will drop in the higher tax enforcement area.