| Management incentives are effective ways to avoid ill effects brought by the fact thatshareholders and managers have different responsibilities. Tax planning is a major subject oftax research. Nowadays, since ownership and management rights slowly drove apart, therelationship between shareholders and managers became a new subject. Unfortunately, thereare very limited papers domestically. While we can take advantages from foreign papers, thereis still a lot of differences between us and them. China has a special shareholder ownershipstructure, which provides opportunities for researching. Therefore, this paper focuses on howmanagement incentives influence tax planning, basing on two ownership structures, whichhas very profound influence.Based on Chinese listed companies and being under the condition of Principal AgencyTheory, this paper researches on how four management incentives—payment incentives,bonds incentives, agency cost, career promotion--affect tax planning behavior: state-ownedand private-owned separately. The results are as follows,(1)Payment and bonds incentives areboth positive, impressive methods to improve tax planning, especially in private-ownedcompanies;(2)Agency cost is a negative incentive which is unlikely to be recommended,especially for state-owned companies;(3)Career promotion is a very effective incentive toimprove tax planning, which should be suggested, in both companies. At last the paper put upsome suggestions.In this paper, the contribution and innovation are as follows,(1)To begin with, itcomprehensively studies the influence of four types of management incentives on taxplanning behavior, enriching the domestic research.(2)Furthermore, the paper also focuses onthe research of agency cost and career promotion—in empirical way, which counts to be veryimpressive contribution to domestic empirical research.(3)Last but not least, itconsiders the special ownership structure in china and studies the differences between them. |
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