The Effects Of Executive Equity Incentives On Corporate Tax Avoidance

Corporate tax avoidance has always been a key area of focus for theoretical and practical research.With the establishment and development of the modern enterprise system,the separation of enterprise ownership and management rights,the inconsistent goal between shareholders and managers leads to the principal-agent problem.Many scholars have begun to explore the relationship between managers and corporate tax avoidance behaviors,opening up new perspectives for researching corporate tax avoidance.Equity incentive is a long-term incentive mechanism for business managers.To a certain extent,it can alleviate the principal-agent problem between shareholders and managers,and encourage managers to make more decisions on production and operation from the perspective of enterprises and shareholders.,as much as possible to reduce business costs.Taxation cost is one of the typical enterprise costs.Does the executive's equity incentive plan encourage executives to make efforts to reduce corporate tax burdens,and will it affect corporate tax avoidance decisions? Is there a difference in the relationship between equity incentives and corporate tax avoidance for different executives? Based on the fact that China's public ownership economy is the mainstay,will the nature of ownership of enterprises affect the relationship between executive equity incentives and corporate tax avoidance? This is the problem to be studied in this paper.This paper studies the relationship between executive equity incentives and corporate tax avoidance with Chinese listed companies as the research object.This paper takes the executive equity incentive as the research entry point,and uses a combination of theoretical analysis and empirical analysis.In terms of theoretical analysis,theoretical analysis is carried out on the basis of collating and reviewing the domestic and foreign research literature on the influencing factors of corporate tax avoidance behavior and the executive equity incentive system.Firstly,the concepts of corporate tax avoidance,corporate executives and equity incentives are defined.The theoretical basis: principalagent theory,tax contract theory and effective tax planning theory.Finally,the paper analyzes the status of China's corporate equity incentive plan,the status of corporate tax avoidance and the tax policy on equity incentives.In terms of empirical analysis,the 2008-2017 China A-share listed companies in the Shanghai and Shenzhen stock markets were used as research samples to conduct an empirical analysis and robustness test on the relationship between executive equity incentives,ownership and corporate tax avoidance behavior.First,establish a measurement model,and carry out regression analysis on the overall sample panel data to study the relationship between executive equity incentives and corporate tax avoidance.Second,divide corporate executives into board,supervisory board and other senior executives to study different executives.The relationship between equity incentives and corporate tax avoidance;further,considering the characteristics of the ownership nature of Chinese enterprises,the dummy variables of the nature of ownership are added to the basic modelto study the nature of ownership to study the relationship between executive equity incentives and corporate tax avoidance.The impact of the relationship;finally,the robustness test is performed using the method of replacing the interpreted variable.The empirical research leads to the following conclusions: 1.Under the condition of limiting other conditions,there is a positive relationship between executive equity incentives and corporate tax avoidance,that is,the higher the degree of executive equity incentives,the greater the degree of corporate tax avoidance.2.In the case of other conditions,there is a difference in the relationship between the equity incentives implemented by different executives and the degree of corporate tax avoidance.There is a positive relationship between the implementation of equity incentives for directors or corporate managers,financial controllers and other senior executives,and the degree of corporate tax avoidance.The equity incentives have a certain inhibitory effect on corporate tax avoidance behavior.3.Under the condition of limiting other conditions,the ownership nature of state-owned holding enterprises has a certain weakening effect on the degree of influence of executive equity incentives on corporate tax avoidance compared with non-state-owned holding enterprises.