Research On Managerial Competence And Corporate Tax Avoidance Behavior

In the age of exploration of knowledge-based economy,managers can be described as "leaders" of the company,managers should seize the opportunity to invest in all kinds of high-risk capital investment as well as prevent the company from getting stranded due to risky activities.Therefore,the manager's ability plays a decisive role in the continuous growth of the company.Managers' ability can influence a company's behavior,such as investment decisions,funding decisions,business performance,earnings management,and other financial behaviors.However,few scholars study the influence of supervisor's ability on tax avoidance and the tax avoidance path that managers will adopt.Based on such situation,this paper focuses on the problems from three perspectives.The first one is how to measure managers' ability? Secondly,does the manager's ability have an impact on the company's tax avoidance? If so,are the effects of this positive or negative correlation? Thirdly,managers with higher capabilities are more willing to choose the paths which affect the company's tax avoidance?Based on the data of Chinese A-share listed companies from 2008 to 2016,we construct a measure of managers' ability based on China's institutional background and verify the correlation between managerial competency and tax avoidance relationship by using DHM's method to measure managers 'abilities.The results show that the more higher ability,the higher the degree of corporate avoidance.Futher,we read a large number of literatures and analysis the income tax data of listed companies,concluded that managers with higher management capabilities tend to choose the following major tax avoidance routes for reasonable tax avoidance: R & D path,depreciation path and overseas business path.Then,this paper divides the whole sample data into high-performance managers group and low-capacity managers group The results show that when the company invests more in R & D,more investment will be made in the assets with accelerated depreciation deduction.When more revenue is transferred to foreign taxpayers,managers with higher capabilities have a more significant impact on the company's tax avoidance.The contributions of this paper are as follows: Firstly,this paper provides empirical data for the research of tax avoidance behavior based on the manager's ability,and confirms the manager's ability related to corporate tax policy can enhance our understanding of the factors that change the corporate income tax paymentsubstantively.Secondly,based on the financial data of Chinese listed companies,this paper constructs the indicators to measure managers' capabilities and expands the research on the economic consequences of managers' capabilities into the tax avoidance activities of enterprises.It not only enriches the methods of measurement but also supplements managers' capabilities Theories Related to Economic Consequences.Thirdly,this article summarizes the existing tax avoidance routes and the analysis of the financial data of the listed companies,and discusses the ways in which the more competent managers are willing to influence the tax avoidance behavior of the companies and plays an important role in the current tax avoidance path of the research company.