Research On The Impact Of Tax Risk On The Volatility Of Stock Returns

As the most important financing place in the financial field,the stock market will greatly affect the of a country.The development of the financial industry,and China’s stock market,as an emerging stock market,has long been characterized by excessive volatility.Excessive volatility increases the risks faced by investors,weakens the resource allocation function of the stock market,and is an important sign that the stock market is not mature enough.It should be noted that the fluctuation of China’s stock income is not only affected by external factors such as the macroeconomic environment and capital market,but also by the tax risks generated by enterprises while paying attention to the after-tax income brought by tax avoidance.With the increasing uncertainty of the tax situation and the increased transparency of capital market information transparency of the capital market,it has caused serious losses to investors,and at the same time has also affected the development of China’s real economy,so the impact of tax risk on stock income fluctuations cannot be ignored.Based on the practical problem of stock income fluctuation,this paper selects data samples of China’s A-share listed enterprises from 2008 to 2020,combines the analysis of entrusted agency theory,effective taxation theory and information asymmetry theory,and then carries out empirical research.This paper finds that tax risk increases stock income volatility;Information opacity acts as a mediator between tax risk and stock yield volatility;The heterogeneity test finds that there are prerequisites for tax risk to improve the performance of stock income fluctuations,and the lower the degree of marketization,the more small-scale enterprises or enterprises with poor internal control quality,the stronger the tax risk on the increase of stock income fluctuations.Based on the above conclusions,this paper contains relevant proposals from the perspective of government and businesses.Government bodies should strengthen the monitoring of tax avoidance and strengthen the level of disclosure of corporate tax information.At the same time,regulators should strengthen the exchange of information between different regulators to help companies identify major risks.Second,companies should improve their corporate governance structure.This will not only help increase the value of the company,but also help improve the efficiency of the capital market and to fully exploit the valuation and backward corporate governance functions of the capital market.