Do Relationship-Based Transactions Matter for Corporate Tax Avoidance? Evidence from China

Bin DAI, Jingyuan WANG, Huan CHANG

Abstract


The existing literatures showing that relationship-based transactions would affect company tax avoidance, but with few empirical evidences. This paper makes an empirical study on the topic of relationship-based transations and corporate tax avoidence, by using the data of manufacturing companies from 2008 to 2016, in Chinese A-share listed market, the empirical study shows that the more relationship-based transactions with suppliers (clients), the more aggressive company tax avoidance, which indicates that the bahavior of company tax avoidance is influenced by business strategies. The study also shows that company’s financial decisions may contain selfish motives of powerful executives. Further, the study indicates that relationship-based transactions can boost company’s propensity for aggressive tax avoidance during fierce market competition. Yet, there are varying degrees of diversification in the moderating effects and weakening control rights by senior managers.


Full Text:

PDF


DOI: http://dx.doi.org/10.22158/jbtp.v6n4p274

Refbacks

  • There are currently no refbacks.


Copyright (c) 2018 Bin DAI, Jingyuan WANG, Huan CHANG

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright © SCHOLINK INC.   ISSN 2372-9759 (Print)    ISSN 2329-2644 (Online)