Study On The Influence Of Managerial Risk Preference On Corporate Tax Avoidance

Tax avoidance means that the taxpayer conducts some tax plannings and proper financial arrangements within the scope of the law or exploiting the loopholes in tax rules so as to reduce tax burden to the largest extent.With the perfection of our tax regulation system and enhancement of taxpayers' subject consciousness,both the individual taxpayers and the corporate taxpayers start to adopt some tax avoidance arrangements which are secret in contents and legal in forms to decrease the regulatory risks.The tax evasion issues is much more serious in our country.For the country,radical tax-evasion degree results in the direct loss of the public revenue and destroys equitable tax principle,which seriously influence the balance between the national income growth and wealth distribution.For the company,tax avoidance is the "double-edged" sword to some extent,on the one hand,it can improve the enterprise value and save the cash flow,on the other hand,it needs lots of investments such as the cost of tax planning,litigation and expenses of dealing with the tax regulators,if it is not settled very well,it will also spoil both the company and the executive's reputation.So tax evasion can be regarded as a risky investment.The existing research mainly discuss the influence on the tax avoidance from the perspective of corporate features,managerial income incentive and corporate governance,but the empirical results can not explain the issue properly.With the rise of behavioral finance and upper echelons theory,the topic of the impact of managers' irrational behavior on the degree of tax avoidance has gradually become the focus in academic cycle,many scholars begin to question the "rational people" hypothesis,some of them study the relation between the characteristics of management and the tax-avoidance degree from the aspect of managers'educational level,age,gender and so on,but we consider that managerial risk preference is another important factor,so this paper extends the study into the managerial risk preference to explore its impact on tax avoidance degree.This could help us understand the motivations of tax avoidance,additionally,it helps the tax regulators prevent radical tax avoidance activities.This thesis is divided into five parts:Chapter one mainly introduces the research background,the contents,the aims and research progress both at home and abroad,then draw the frame diagram.In the second part,the thesis defines related concepts,introduces some theories and deeply discusses the mechanism of the effects of managerial risk preference on tax avoidance.Additionlly,we describes some measurement methods so as to lay the foundation of model building and empirical tests.In the third part,the thesis analysis A-share listed companies' tax avoidance status to watch that if it is the common phenomenon in our country.Additionally,based on the literature review and related theory,the paper raises two hypothesis.In the forth part,establish the research model and set some related variables to test the relationship between tax avoidance degree and managerial risk preference using the data of A-share listed companies during 2010-2015.First of all,we measure the managerial risk preference using principal component analysis method,and then make further empirical examination on other relevant variables.The tax planning objectives may be different between state-owned and non-state-owned enterprises as a result of the difference of principle-agent relationship,so whether the general results above may change or not under different property right characteristics?Therefore,we divide our sample into two types-state-owned and non-state-owned listed companies based on different character of rulers.Finally,we make a robustness test on the empirical results above to ensure the reliability of the outcome,and the outcome is the same as the above results.In the end,the paper made a conclusion in allusion to the empirical research result we have acquired and put forward some suggestions.The finding indicates that managerial risk preference has a significant impact on tax avoidance degree,the higher the managerial risk preference,the higher the tax avoidance degree;non-state-owned companies are more sensitive to tax avoidance degree than that of the state-owned enterprises.