Corporate Tax Avoidance,Political Connections And Management Perks

Our country now in a period that the economic system present continuous development and the tax system continues to improve.State and relevant government departments focus on if listed companies comply with the national tax system in order.In recent years,the relevant statistics show our country's tax revenue growth slow down,some study found that it's not the economic downturn and the transformation from business tax to VAT but the increasingly serious tax avoidance problems that lead it happen.In 2008,the tax system was reformed,and the tax burden of the enterprises was reduced.However,the tax expenditure of the enterprises still accounted for one-quarter of the pre-tax profits of the enterprises and became one of the main aspects of the cash flow expenses.Therefore,in order to save cash flow expenses,the enterprise has the motivation to create a fuzzy trading environment and take the behavior of saving tax expenditure.And the invisible benefits and remuneration of corporate executives has been a hot topic of concern to the state and society.What's more,on December 4,2012,General Secretary Xi Jinping presided over the CPC Central Committee Political Bureau meeting and proposed to have the reform of Salary System in the Management of State-owned Enterprises.General Secretary Xi Jinping considered and approved the "Eight Provisions" drafted by Central Political Bureau on improving the work style and maintaining close contact with the masses,which involves resolutely eliminate the"hospitality,dinner and living treatment" and other job consumption inevitably have a direct impact on state-owned enterprises,ultimately push "Perks" related issues onto the cusp of public opinion.According to the materialism view of "existence and reasonable",the occurrence and existence of the perks are inevitable under the specific conditions,with both positive and negative aspects.Previous literature of perks focused on its damage to the efficiency of enterprises,which is considered as the product of "moral hazard" under the framework of "Principal-agent",while ignoring the positive impact of perks on promotion of enterprise efficiency under the concept of "incentive" and "business relationship".Therefore,in the context of our country's unique economic system and tax system,it is a questionable and worthwhile research to study the way to realize the management perks,and at the same time,with the help of the three concepts of management perks as "Agent concept","Business relationship concept","Incentive Concept",this paper carry out research of the relationship among corporate tax avoidance,political connections and management perks.This paper selects all A-share listed companies in 2012 to 2015 that disclosure the data used to calculate the management perks in the financial statements.At the same time this paper uses the principal-agent theory,information asymmetry theory,rent-seeking theory and psychological contract theory,empirical analysis method based on multiple regression to study the effect of tax avoidance behavior of listed companies on the management perks,and considers how the political connections play a role in the above relations.What's more,in the context of unique property rights system of our country,this paper also analyzes if the relationship among corporate tax avoidance,political connections and management perks in the state-owned,non-state-owned listed companies are different.This paper consists of six parts,the first part,the introduction.This part mainly elaborates the research background and the theory and the practical significance,s the innovation point of this article,and finally summarizes the research framework of the whole thesis.The second part,the literature review.Through the combing of domestic and foreign literature we can know the latest developments in this field which lays a theoretical foundation for the following empirical research.On this basis,summarize and evaluate the research results of predecessors,and put forward the research perspective of this paper.The third part,the theoretical analysis and research hypothesis,including the collation of related concept for this article,the integration of the principal-agent theory,information asymmetry theory,rent-seeking theory and psychological contract theory,the theoretical deduction,finally put forward the hypothesis of this study.The fourth part,the research design.This is the essential part of this paper,mainly to introduce the required model in verifying the hypothesis of this paper and the sources and selection of samples and data needed in this paper.At the same time,to define and quantify the variables that are required in the model.The fifth part,empirical analysis and results.First,carry out the descriptive statistics of the selected samples and the correlation analysis of the variables.Based on the above variables and the model,the regression analyses are carried out to verify the research hypothesis.Then,prove the robustness of this paper 's research content through to the results of the robustness test.The last part,summary.This part draws the conclusions based on above five parts and analyze the conclusions,then provide some advice on improving the rationality of management perks to achieve the meaning of this writing.Finally,summarize and put forward the shortcomings of this article and look forward to further study.The results of this study are as follows:First,the corporate tax avoidance has a positive impact on the management perks,that is,the higher the tax avoidance degree,the higher the level of management perks,and the above relationship is proved to be significant in empirical test.No matter which concept out of "Agent concept" or"Incentive concept" and "Business relationship concept" that the management perks based on,the corporate tax avoidance all have positive effect on management perks.Second,the existing political connections have played a negative regulatory role in the relationship between the corporate tax avoidance behavior and management perks.Under the "Incentive concept" and "Business relationship concept" of management perks,the existence of political connections can save the expenditure incurred by management in order to establish the transaction network,and reduce the"Rent-seeking costs".Thirdly,in the context of our country's unique property rights,it is found that only in the non-state-owned enterprises,the existing political connection of enterprises have played a negative regulatory role in the relationship between the corporate tax management perks,and in the state-owned enterprises,the regulatory role is not significant.It is hoped that this article will provide some empirical evidences for the improvement of the national tax system and the formulation of the standards for the rationality of management perks of the listed companies,and finally promote the improvement of the enterprise's operating efficiency.