Tax Burden And Corporate Financing Constraints

Since the 18 th National Congress of the Communist Party of China,the word “reform” has been frequently mentioned.From deepening the supply-side structural reforms to tax reforms,market-oriented reforms,financial system reforms,etc.,China's economic system is in a critical period of transformation.In recent years,China's rapid economic growth has made the competition in the capital market fiercer,and financing difficulties have become a prominent problem restricting the healthy development of enterprises.Tax burden is an inevitable internal constraint to the development of enterprises.The increase of tax burden will reduce the operating cash flow and profit margin of enterprises.As a result,the company's internal financing capacity is seriously insufficient,and the external financing capacity cannot fully meet the increased external capital demand of enterprises.Enterprises are subject to more financing constraints.At the same time,with the deepening of China's market-oriented reform,in the area with the higher level of marketization,the government has reduced its intervention in the economy,the financial market system was improved,and the corporate tax burden pressure and financing environment have changed.Therefore,the impact of tax burden on corporate financing constraints may be regulated by the level of marketization.This paper firstly analyzes the domestic and foreign literature research on corporate tax burden and corporate financing.Next,this paper analyzes the reasons for the heavy tax burden of Chinese enterprises and the important tax cuts and fee reduction measures introduced in recent years.In addition,the current financing scale,financing methods and financing support policies of Chinese enterprises are also analyzed.And then this paper combines with the theoretical analysis,using the data of the World Bank China Enterprise Survey 2012 as the research sample,takes the empirical analysis method to study the impact of tax burden on corporate financing constraints.At the same time,the marketization index created by Fan gang and Wang Xiaolu was used to measure the marketization level of sample enterprises in various regions,to explore the effect of the marketization level.The empirical results show that raising the tax burden will significantly increase the financing constraints of enterprises,and this relationship will be affected by the differences in the level of marketization in different regions.In regions with relatively high marketization level,the tax burden of enterprises is reduced,the financing environment is improved,and the respective roles of marketization on tax burdens and financing constraints are integrated.Eventually,the tax burden is still an important factor restricting enterprise financing.Further,this paper finds that the intensified impact of tax burden on corporate financing constraints is more strongly manifested in private enterprises and enterprises without research and development activities,while whether the enterprises export will not have a substantial impact on the degree of intensification.This paper focuses on the subjective feelings of enterprises on tax burden and financing constraints,and takes into account the influence of China's special marketization degree and regional differences.This study has certain reference value for the government to support the development of the real economy.Finally,according to the status quo analysis and empirical research results of this paper,the related policies to reduce the actual tax burden of enterprises and ease the financing constraints of enterprises are put forward.