Too far east is west : tax risk, tax reform and investment timing
Purpose: Tax risk refers to the uncertainty of future corporate taxation. Tax reform is a key issue in major current tax system adjustments that seriously affect a firm's tax risk. In response to changes in the economic environment, many countries are actively executing tax reform. Long-term reforms implemented for a smooth transition may instead increase corporate risk. This study examines the relationship among tax risk, tax reform and investment timing. Design/methodology/approach: Selecting the Shanghai Stock Exchange and Shenzhen Stock Exchange A-share listed companies' panel data from 2008 to 2017, the paper used survival analysis and the propensity score matching-difference in difference models. Findings: The results show that a higher corporate tax risk results in more deferred investments, which are further examined using the latest Chinese value-added tax reform as a natural experiment. Originality/value: The conclusion serves as an important reference for governments to balance reform time and to support enterprises in effectively identifying and managing tax risk under tax reform.
Year of publication: |
2020
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Authors: | Chen, Wanyi |
Published in: |
International Journal of Managerial Finance. - Emerald, ISSN 1743-9132, ZDB-ID 2227388-8. - Vol. 17.2020, 2 (19.06.), p. 303-326
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Publisher: |
Emerald |
Saved in:
Online Resource
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