Taxation Structure, Local Government Financial Transparency And Corporate Cash Flow Risk

As a "barometer" of corporate operation, cash flow risk weighs the crisis and opportunities what a company is facing precisely. Taxation policies exert significant influence on corporations for its being an important component of macro policies. With the implementation of "Business to Value-added Tax Reformation", discussions about the effects of taxation upon companies are ascending both in academia and practical circle, including direct/indirect tax and "Business to Value-added Tax Reformation". Based on the perspective of corporate cash flow risk management, the paper managed to discover the effects and mechanism through empirical analysis on a data set on A Stock listed companies in combination with current taxation structure reformation. Empirical results show that:the greater the proportion of company income tax is, the higher cash flow risk is; local government financial transparency has a regulating effect within the relation between taxation structure and corporate cash flow risk, it means a higher local government financial transparency leads to greater proportion of company income tax thus higher corporate cash flow risk. Besides, this paper summarizes and concludes literatures available to excavate intrinsic logic and emphasizes conduction from macro policies to micro companies which provides theoretical reference for companies' tax management and avoiding cash flow risk as well as the perspective of cash flow risk for state's establishing taxation policies.