Ownership Structure,Tax Planning And Equity Value

Tax planning as an important corporate decision is a widespread phenomenon, it has become a topic that tax authorities and investors are concerned about, and it also has attracted much attention of scholars. Classical economics think that tax planning behaviors directly reduce the outflow of cash and increase shareholders’value. But tax agency theory thinks that the result of tax planning is uncertain, because there is an interaction between corporate tax planning activity and agency problems between shareholders and management. The opacity of tax planning can provide umbrella for the opportunistic behavior of management. Therefore, the research of tax planning must concern about the motivation and result.Using a sample of quoted firms in the stock markets of Shanghai and Shenzhen from2009to2011, the paper put the ownership structure、tax planning and equity value into a unified analytical framework, with the ownership structure (equity nature, ownership concentration, equity restriction ration) as moderating variable. The paper examines the relationship between degree of tax planning and equity value, and it also discuss the governance effect of ownership structure, which means the potential moderating influence of ownership structure on the relationship between degree of tax planning and equity value. This paper aims at providing evidence to support the point that tax planning of firms will lead to the agency costs and ownership structure have the governance effect on releasing agency conflicts. The conclusion of this paper show the degree of tax planning which state-owned enterprises conduct is significantly higher than the privately-owned enterprises’, and there exists a negative relationship between the degree of tax planning and equity value in state-owned enterprises, but there exists a positive relationship between the degree of tax planning and equity value in privately-owned enterprises. Compared with the privately-owned enterprises, the ownership concentration of state-owned enterprises is higher, but the equity restriction ration of state-owned enterprises is lower. The ownership concentration of state-owned enterprises exert a negative governance effect on the relationship between the degree of tax planning and equity value, but the equity restriction ration of the privately-owned enterprises have a positive governance effect. The equity restriction ration both exert positive governance effect on the relationship between the degree of tax planning and equity value in state-owned enterprises and privately-owned enterprises, but the governance effect in state-owned enterprises is weaker.