Research On The Influence Of Tax Avoidance On Cost Stickiness

The income tax is the last item of the deductions before the profit distribution of the enterprise,so the shareholders are always inclined to improve the personal income by tax evasion.However,under the background of separation of two rights,the self motivation of managers makes tax avoidance give benefit to the enterprise,and costs and expenses are also arising from certain.Cost expense is not only an important index to measure the management quality of the managers,but also is closely related to the internal structure,performance and sustained development of the enterprise.In the process of enterprise production and management,cost expense can easily become a paradise for self-profit managers because of its high flexibility and maneuverability.When facing the cost adjustment decisions,managers' self-interest motivation shows that the rate of cost increase which is resulted from the business volume increases is larger than that when the business volume decreases and will produce stickiness.The development of corporate governance is based on the separation of the two powers and the shareholders supervise and encourage to the management.A higher corporate governance level can effectively inhibit the management self interest and alleviate the positive correlation between tax evasion and cost stickiness.Study on tax evasion and Cost Stickiness relationship not only is good for exposing the "black box" to the behavior of cost management and improving the quality of enterprise management,but also can help the shareholders have a more profound understanding of the consequences of tax avoidance,consider more seriously in the decision-making of tax planning,science effectively guide the management of tax planning reasonable and efficient and improve enterprise value.This paper firstly,according to the relevant literature review,gets the impact mechanism of the tax avoidance effecting on cost stickiness,and then puts forward the research hypothesis and verify the hypothesis by empirical regression,finally joined the corporate governance supervision and incentive to explore different corporate governance variables under the regulation,tax avoidance effect on cost stickiness.This paper draws the following conclusions:(1)China manufacturing listed companies generally have cost stickiness;(2)the higher the degree of tax avoidance,the greater the cost Stickiness is;(3)compared to the cost,the marketing cost which is manipulated by management easily showed stronger viscosity;(4)compared to the low supervision group,high degree of supervision group showed lower cost stickiness;(5)compared to the low viscosity,the highdegree of incentive group had lower cost stickiness;(6)the higher the supervision mechanism can effectively alleviate the tax avoidance enhancement effect on cost stickiness;(7)higher incentive mechanism can effectively alleviate the tax avoidance enhancement effect on cost stickiness.