Research On The Influence Of Tax Avoidance To Investment Efficiency Of Listed Companies

Corporate tax avoidance is a widespread phenomenon in the world, a lot of academic literature indicate that tax avoidance is an important company decision.Traditional concept is that tax avoidance improves company’s investment efficiency, but the agency theory of tax avoidance contains that tax avoidance tend to exacerbate information asymmetry of internal and external business, and it will distort the incentive contract, then it will cause agents problems as well as information asymmetry and agency problems are important causes to inefficient investment of enterprise. Based on this, this paper will study the influence of tax avoidance to investment efficiency of companies.Firstly, this paper analyzes and summaries research literature in the fields of tax avoidance and investment efficiency; Secondly introduce some concepts and theories about tax avoidance and investment efficiency, describe the main forms of tax avoidance in international and domestic enterprises and measure of investment efficiency; and empirical research design and put forward hypotheses, and constructs measure regression model of investment efficiency. Finally with the object of Shanghai A-share listed companies’ data in 2012-2014 years, using multiple linear regression model and SPSS19.0 statistical software to make data analysis of descriptive statistics, correlation analysis and regression analysis. Then make out conclusion, make recommendations, make introduction of study limitations and future prospects of this paper.The results shows that:(1) The majority of listed companies in our country exist the phenomenon of inefficient investment, and under-investment situation is more common,but in terms of extent, over-investment is higher than under-investment;(2) The majority of listed companies’ effective rate of tax are lower than the nominal tax rate, and the taxable income is lower than accounting profit, indicating that tax avoidance is a widespread phenomenon in listed companies;(3) Tax avoidance reduces the investment efficiency of enterprises, and the main consequence of tax avoidance activity is over-investment, but there exists weak evidence proving that tax avoidance lead to under-investment;(4) Free cash flow hold by company as well as factors related to corporate governance significantly influence the investment efficiency.