Taking advantage of the agency conflicts between controlling shareholders and minority shareholders and the weak corporate governance in a transition economy, we investigate the relationship between tax avoidance (proxied by effective tax rates) and tunneling (proxied by related-party lending)...

Local governments play dual, but conflicting roles in China's tax system. That is, they are both tax collectors and controlling shareholders of firms subject to tax payments. We investigate how local governments balance their tax collection and tax avoidance incentives. We find that the...

This study investigates whether and how book-tax differences (BTDs) are related to earnings management, tax management, and their interactions in Chinese listed companies. Using unique tax-effect BTDs obtained from Chinese B-share listed firms, we find that firms with strong incentives for...