The impact of tax avoidance on enterprise investment efficiency. (18th August 2018)

• Record Type: Journal Article
• Authors: Bailing, Jiang; Rui, Ji
• Is Part Of: Journal of discrete mathematical sciences & cryptography. Volume 21:Number 6(2018)
• Page Start: 1293
• Page End: 1298
• Publication Date: 2018-08-18
• Subjects: Tax avoidance -- Debt financing cost -- Investment–cash flow sensitivity -- Overinvestment; Computer science -- Mathematics -- Periodicals; Cryptography -- Periodicals; Computer science -- Mathematics; Cryptography; Periodicals; 004.0151
• DOI: 10.1080/09720529.2018.1526404
• Languages: English
• ISSNs: 0972-0529

Abstract

Abstract: Focusing on the economic consequences of tax avoidance, this paper tries to explore the impact of a company's tax avoidance, especially the correlation between tax avoidance and overinvestment, based on the conditions of the companies listed on the Shanghai & Shenzhen Stock Exchanges (A–share companies). Our study reveals that a higher level of tax avoidance is associated with higher investment–cash flow sensitivity as well as a tendency to overinvest. This finding may be useful to enterprises when they choose their tax avoidance activities.