Cross-listing,Property Rights And Corporate Tax Avoidance

With the development of economic globalization,the economic connections between the countries (regions) have become more and more closely.In order to obtain more external funds and to seek better investment opportunities,many corporations choose to cross-list in two or more capital markets.The upsurge of enterprise cross-listing has attracted the attention of scholars in the worldwide and a large number of researches begin to emerge which analysis the causes and the influence of enterprises’ cross-listing behavior.In a lot of theories about cross-listing,the Bonding Hypothesis is more prevalent at present.This theory holds that,after the enterprises’ cross-listing,the legal binding and the reputation binding would have an impact on the corporate behavior.At the same time,corporations’ tax is one of the company’s costs,and avoiding tax phenomenon usually exists around the companies.So cross-listing of the enterprise which brings about changes in the environment would have an impact on corporations’ taxes to a certain extent.This paper selects Shanghai and Shenzhen A-share and A+H-share listed companies from 2003 to 2014 as samples.Based on the hypothesis of Bonding Hypothesis,the article explores the effect of cross-listing on corporate tax avoidance behavior from the legally bonding and reputation of bonding aspects,and then analysis the influence of the company’s property.Research results show that in the case of other similar conditions,the company’s cross-listing behavior would reduce the degree of enterprise of tax evasion.In addition,compared to the state-owned corporation,the impact of cross-listing on non-state-owned corporation would become greater.The possible contribution of this paper is:Through analyzing how Bonding hypothesis(legal binding hypothesis,reputation of binding hypothesis)influence the cross-listing companies,this paper studies the influence of the cross-listing factor on listed companies,and then explores whether property rights affect the relationship between cross-listing and corporate tax avoidance.The results can enrich the studies of the relationship of cross-listing and avoiding corporation tax to some extent.This paper is organized as follows:the full text is divided into seven parts.The first part is the introduction,which describes the background,the significance and innovative points of this research.The second part is literature review,which consists of three parts:the cross-listing motivation and the effect of cross-listing on the enterprise;the influence factors and economic consequences of corporate tax-avoidance behavior;comparative analysis of tax-avoiding behavior from different property rights of companies.The third part is the comparison between the Chinese mainland and Hong Kong in the enterprises external environment,which has three parts:the legal system,the reputation media and investors’ idea.The fourth part is theoretical analysis and research hypotheses,mainly explains the effect of the cross-listing on companies’ tax avoidance behavior from the angle of the legal bonding hypothesis and the reputation of bonding hypothesis,and then analysis whether corporate property rights have any effect on the results.The fifth part is the empirical research design,which will describe the models,the sample selection,the data sources and the process of corporate tax calculation.The sixth part shows the empirical results and the corresponding analyses.Last but not the least is the relevant conclusions and possible policy recommendations.