4,428
Views
19
CrossRef citations to date
0
Altmetric
Article

Financial statement comparability and corporate tax avoidance: evidence from China

&
Pages 1813-1843 | Received 06 Feb 2018, Accepted 22 Oct 2018, Published online: 23 Jul 2019

References

  • Akdoğu, E., & MacKay, P. (2012). Product markets and corporate investment: Theory and evidence. Journal of Banking & Finance, 36(2), 439–453. doi: 10.1016/j.jbankfin.2011.08.001
  • Alchian, A. A. (1950). Uncertainty, evolution, and economic theory. Journal of Political Economylitical Economy, 58(3), 211–221. doi: 10.1086/256940
  • Ali, A., Chen, T., & Radhakrishnan, S. (2007). Corporate disclosures by family firms. Journal of Financial Economics, 44(1–2), 238–286. doi: 10.1016/j.jacceco.2007.01.006
  • Alimov, A. (2014). Product market competition and the value of corporate cash: Evidence from trade liberalization. Journal of Corporate Finance, 25, 122–139. doi: 10.1016/j.jcorpfin.2013.11.011
  • Allen, A., Francis, B. B., Wu, Q., & Zhao, Y. (2016). Analyst coverage and corporate tax avoidance. Journal of Banking & Finance, 73, 84–98. doi: 10.1016/j.jbankfin.2016.09.004
  • Armstrong, C. S., Blouin, J. L., Jagolinzer, A. D., & Larcker, D. F. (2015). Corporate governance, incentives, and tax avoidance. Journal of Accounting and Economics, 60(1), 1–17. doi: 10.1016/j.jacceco.2015.02.003
  • Aschhoff, B., & Schmidt, T. (2008). Empirical evidence on the success of R&D cooperation - Happy together?. Review of Industrial Organization, 33(1), 41–62.
  • Ataay, A. (2018). Performance sensitivity of executive pay: the role of ownership structure, board leadership structure and board characteristics. Economic Research-Ekonomska Istraživanja, 31(1), 1152–1168. doi: 10.1080/1331677X.2018.1456951
  • Badertscher, B. A., Katz, S. P., & Rego, S. O. (2013). The separation of ownership and control and corporate tax avoidance. Journal of Accounting and Economics, 56(2-3), 228–250. doi: 10.1016/j.jacceco.2013.08.005
  • Ball, R. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. Accounting and Business Research, 36(sup1), 5–27. doi: 10.1080/00014788.2006.9730040
  • Barth, M. E. (2013). Global comparability in financial reporting: What, why, how, and when?. China Journal of Accounting Studies, 1(1), 2–12. doi: 10.1080/21697221.2013.781765
  • Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of Accounting & Economicsand, 30(1), 3–37.
  • Bauer, A. M. (2016). Tax avoidance and the implications of weak internal controls. Contemporary Accounting Research, 33(2), 449–486. doi: 10.1111/1911-3846.12151
  • Bauwhede, H. V., De Meyere, M., & Van Cauwenberge, P. (2015). Financial reporting quality and the cost of debt of SMEs. Small Business Economics, 45(1), 149–164.
  • Beyer, A., Cohen, D., Lys, T. Z., & Walther, B. R. (2010). The financial reporting environment: Review of the recent literature. Journal of Accounting and Economics, 50(2-3), 296–343. doi: 10.1016/j.jacceco.2010.10.003
  • Blaylock, B. S. (2016). Is Tax Avoidance Associated with economically significant rent extraction among U.S. firms?. Contemporary Accounting Research, 33(3), 1013–1043. doi: 10.1111/1911-3846.12174
  • Bowen, R. M., Chen, X., & Cheng, Q. (2008). Analyst coverage and the cost of raising equity capital: Evidence from underpricing of seasoned equity offerings. Contemporary Accounting Research, 25(3), 657–700. doi: 10.1506/car.25.3.1
  • Bradshaw, M., Liao, G., & Ma, M. (Shuai). (2016). Ownership structure and tax avoidance: Evidence from agency costs of state ownership in China. (SSRN ELibrary).
  • Brochet, F., Jagolinzer, A. D., & Riedl, E. J. (2013). Mandatory IFRS adoption and financial statement comparability. Contemporary Accounting Research, 30(4), 1373–1400.
  • Brüggemann, U., Hitz, J.-M., & Sellhorn, T. (2013). Intended and unintended consequences of mandatory IFRS adoption: A review of extant evidence and suggestions for future research. European Accounting Review, 22(1), 1–37. doi: 10.1080/09638180.2012.718487
  • Bushman, R. (1989). Firm characteristics and analyst following. Journal of Accounting and Economics, 11(2–3), 255–274.
  • Bushman, R., Chen, Q., Engel, E., & Smith, A. (2004). Financial accounting information, organizational complexity and corporate governance systems. Journal of Accounting and Economics, 37(2), 167–201. doi: 10.1016/j.jacceco.2003.09.005
  • Byoun, S., & Xu, Z. (2016). Product market competition and financial decisions during a financial crisis. Financial Management, 45(2), 267–290.
  • Cai, H., & Liu, Q. (2009). Competition and corporate tax avoidance: Evidence from Chinese industrial firms. The Economic Journal, 119(537), 764–795. doi: 10.1111/j.1468-0297.2009.02217.x
  • Chang, L.-L., Hsiao, F. D., & Tsai, Y.-C. (2013). Earnings, institutional investors, tax avoidance, and firm value: Evidence from Taiwan. Journal of International Accounting, Auditing and Taxation, 22(2), 98–108. doi: 10.1016/j.intaccaudtax.2013.07.001
  • Chen, C.-W., Collins, D. W., Kravet, T., & Mergenthaler, R. D. (2018). Financial statement comparability and the efficiency of acquisition decisions. Contemporary Accounting Research, 35(1), 164–202. doi: 10.1111/1911-3846.12380
  • Chen, C., Li, L., & Ma, M. L. Z. (2014). Product market competition and the cost of equity capital: Evidence from China. Asia-Pacific Journal of Accounting & Economics, 21(3), 37–41. doi: 10.1080/16081625.2014.893197
  • Chen, H., Chen, J. Z., Lobo, G. J., & Wang, Y. (2010). Association between borrower and lender state ownership and accounting conservatism. Journal of Accounting Research, 48(5), 973–1014. doi: 10.1111/j.1475-679X.2010.00385.x
  • Chen, J. Z., Hong, H. A., Kim, J., & Ryou, J. W. (2017). Information processing costs and corporate tax aggressiveness: Evidence from the SEC ’ s XBRL mandate. (SSRN Working Paper).
  • Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms?. Journal of Financial Economics, 95(1), 41–61. doi: 10.1016/j.jfineco.2009.02.003
  • Chen, T., Harford, J., & Lin, C. (2015). Do analysts matter for governance? Evidence from natural experiments. Journal of Financial Economics, 115(2), 383–410. doi: 10.1016/j.jfineco.2014.10.002
  • Chen, T., & Lin, C. (2017). Does information asymmetry affect corporate tax aggressiveness? Journal of Financial and Quantitative Analysis, 52(5), 2053–2081. doi: 10.1017/S0022109017000576
  • Chen, X., Hu, N., Wang, X., & Tang, X. (2014). Tax avoidance and firm value: Evidence from China. Nankai Business Review International, 5(1), 25–42. doi: 10.1108/NBRI-10-2013-0037
  • Choi, J.-H., Choi, S., Myers, L., & Ziebart, D. (2017). Financial statement comparability and the informativeness of stock prices about future earnings. SSRN ELibrary.
  • Chyz, J. A., Ching Leung, W. S., Zhen Li, O., & Meng Rui, O. (2013). Labor unions and tax aggressiveness. Journal of Financial Economics, 108(3), 675–698. doi: 10.1016/j.jfineco.2013.01.012
  • Chyz, J. A., & White, S. D. (2014). The association between agency conflict and tax avoidance: A direct approach. Advances in Taxation, 21(1), 107–138. doi: 10.1108/S1058-749720140000021007
  • Clemens, M. A., Redelet, S., & Bhavnani, R. (2012). Counting chickens when they hatch: The short term effect of aid on growth. Economic Journal, 90(561), 1–33.
  • Collins, D. W., Kothari, S. P., Shanken, J., & Sloan, R. G. (1994). Lack of timeliness and noise as explanations for the low contemporaneuos return-earnings association. Journal of Accounting and Economics, 18(3), 289–324. doi: 10.1016/0165-4101(94)90024-8
  • Cook, K. A., Moser, W. J., & Omer, T. C. (2017). Tax avoidance and ex ante cost of capital. Journal of Business Finance & Accounting, 44(7–8), 1109–1136. doi: 10.1111/jbfa.12258
  • De Franco, G., Kothari, S. P., & Verdi, R. S. (2011). The benefits of financial statement comparability. Journal of Accounting Research, 49(4), 895–931. doi: 10.1111/j.1475-679X.2011.00415.x
  • DeFond, M., Hu, X., Hung, M., & Li, S. (2011). The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability. Journal of Accounting and Economics, 51(3), 240–258. doi: 10.1016/j.jacceco.2011.02.001
  • Desai, M. A., & Dharmapala, D. (2006). Corporate tax avoidance and high powered incentives. Journal of Financial Economics, 79(1), 145–179. doi: 10.1016/j.jfineco.2005.02.002
  • Desai, M. A., & Dharmapala, D. (2009). Corporate tax avoidance and firm value. Review of Economics and Statistics, 91(3), 537–546. doi: 10.1162/rest.91.3.537
  • Doellman, T., Huseynov, F., Nasser, T., & Sardarli, S. (2017a). Can paying taxes substitute for corporate social responsibility? evidence from socially responsible investment funds. (SSRN eLibrary).
  • Doellman, T., Huseynov, F., Nasser, T., & Sardarli, S. (2017b). Do mutual funds consider tax avoiding firms too risky? (SSRN eLibrary)
  • Dyck, A., Morse, A., & Zingales, L. (2010). Who Blows the Whistle on Corporate Fraud?. The Journal of Finance, LXV(6), 2213–2253. doi: 10.1111/j.1540-6261.2010.01614.x
  • Dyreng, S. D., Hoopes, J. L., & Wilde, J. H. (2016). Public Pressure and Corporate Tax Behavior. Journal of Accounting Research, 54(1), 147–186. doi: 10.1111/1475-679X.12101
  • Faccio, M. (2006). Politically connected firms: Can they squeez the state? American Economic Review, 96(1), 369–386. doi: 10.1257/000282806776157704
  • Financial Accounting Standards Board (FASB). (2010). The Conceptual Framework for Finanacial Reporting, Qualitative Characteristics of Useful Financial Information.
  • Frank, M. M., Lynch, L. J., & Rego, S. O. (2009). Tax reporting aggressiveness to aggressive and its relation financial reporting. The Accounting Review, 84(2), 467–496. doi: 10.2308/accr.2009.84.2.467
  • Gallemore, J., & Labro, E. (2015). The importance of the internal information environment for tax avoidance. Journal of Accounting and Economics, 60(1), 149–167. doi: 10.1016/j.jacceco.2014.09.005
  • Gallemore, J., Maydew, E. L., & Thornock, J. R. (2014). The reputational costs of tax avoidance. Contemporary Accounting Research, 31(4), 1103–1133. doi: 10.1111/1911-3846.12055
  • Gokalp, O. N., Lee, S. H., & Peng, M. W. (2017). Competition and corporate tax evasion: An institution-based view. Journal of World Business, 52(2), 258–269. doi: 10.1016/j.jwb.2016.12.006
  • Gow, I. D., Larcker, D. F., & Reiss, P. C. (2016). Causal inference in accounting research. Journal of Accounting Research, 54(2), 477–523. doi: 10.1111/1475-679X.12116
  • Graham, J. R., Hanlon, M., Shevlin, T., & Shroff, N. (2014). Incentives for tax planning and avoidance: Evidence from the field. The Accounting Review, 89(3), 991–1023. doi: 10.2308/accr-50678
  • Habib, A., Hassan, M. M., & Al-Hadi, A. (2017). Financial statement comparability and corporate cash holdings. Journal of Contemporary Accounting & Economics, 13(3), 304–321. doi: 10.1016/j.jcae.2017.10.001
  • Hanlon, M., & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50(2-3), 127–178. doi: 10.1016/j.jacceco.2010.09.002
  • Hanlon, M., & Slemrod, J. (2009). What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement. Journal of Public Economics, 93(1-2), 126–141. doi: 10.1016/j.jpubeco.2008.09.004
  • Hart, O. D. (1983). The Market Mechanism as an Incentives Scheme. The Bell Journal of Economics, 14(2), 366–382. doi: 10.2307/3003639
  • Hasan, I., Kim, I., Teng, H., & Wu, Q. (2015). The effect of foreign institutional ownership on tax avoidance: International evidence. (SSRN ELibrary, (May), Working paper).
  • He, W. (2012). Agency problems, product market competition and dividend policy in Japan. Accounting & Finance, 52(3), 873–901. doi: 10.1111/j.1467-629X.2011.00414.x
  • Healy, P., & Palepu, K. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclostire literature. Journal of Accounting and Economics, 31(1-3), 405–440. doi: 10.1016/S0165-4101(01)00018-0
  • Heckman, J., & Pinto, R. (2015). Causal analysis after haavelmo. Econometric Theory, 31(1), 115–151. doi: 10.1017/S026646661400022X
  • Higgins, D., Omer, T. C., & Phillips, J. D. (2015). The influence of a firm ’s business strategy on its tax aggressiveness. Contemporary Accounting Research, 32(2), 674–702. doi: 10.1111/1911-3846.12087
  • Hope, O. K., Ma, M. S., & Thomas, W. B. (2013). Tax avoidance and geographic earnings disclosure. Journal of Accounting and Economics, 56(2-3), 170–189. doi: 10.1016/j.jacceco.2013.06.001
  • Horn, H., Lang, H., & Lundgren, S. (1994). Competition, long run contracts and internal inefficiencies in firms. European Economic Review, 38(2), 213–233. doi: 10.1016/0014-2921(94)90056-6
  • Huang, H. H., Lobo, G. J., Wang, C., & Xie, H. (2016). Customer concentration and corporate tax avoidance. Journal of Banking and Finance, 72, 184–200. doi: 10.1016/j.jbankfin.2016.07.018
  • Imhof, M. J., Seavey, S. E., & Smith, D. B. (2017). Comparability and cost of equity capital. Accounting Horizons, 31(2), 125–138. doi: 10.2308/acch-51710
  • Irani, R. M., & Oesch, D. (2013). Monitoring and corporate disclosure: Evidence from a natural experiment. Journal of Financial Economics, 109(2), 398–418. doi: 10.1016/j.jfineco.2013.02.021
  • Jiménez-Angueira, C. E. (2018). The effect of the interplay between corporate governance and external monitoring regimes on firms’ tax avoidance. Advances in Accounting, 41(February), 7–18. doi: 10.1016/j.adiac.2018.02.004
  • Katz, S., Khan, U., & Schmidt, A. P. (2013). Tax avoidance and future profitability. (SSRN ELibrary).
  • Kerr, J. N. (2012). The real effects of opacity: Evidence from tax avoidance. (SSRN Working Paper Series).
  • Khurana, I. K., & Moser, W. J. (2013). Institutional Shareholders’ Investment Horizons and Corporate Tax Avoidance. The Journal of the American Taxation Association, 35(1), 111–134. doi: 10.2308/atax-50315
  • Kim, C., & Zhang, L. (2016). Corporate political connections and tax aggressiveness. Contemporary Accounting Research, 33(1), 78–114. doi: 10.1111/1911-3846.12150
  • Kim, J.-B., Li, L., Lu, L. Y., & Yu, Y. (2016). Financial statement comparability and expected crash risk. Journal of Accounting and Economics, 61(2-3), 294–312. doi: 10.1016/j.jacceco.2015.12.003
  • Kim, S., Kraft, P., & Ryan, S. G. (2013). Financial statement comparability and credit risk. Review of Accounting Studies, 18(3), 783–823. doi: 10.1007/s11142-013-9233-z
  • Kubick, T. R., Lynch, D. P., Mayberry, M. A., & Omer, T. C. (2015). Product market power and tax avoidance: Market leaders, mimicking strategies, and stock returns. Accounting Review, 90(2), 675–702. doi: 10.2308/accr-50883
  • Lanis, R., & Richardson, G. (2011). The effect of board of director composition on corporate tax aggressiveness. Journal of Accounting and Public Policy, 30(1), 50–70. doi: 10.1016/j.jaccpubpol.2010.09.003
  • Law, K. K. F., & Mills, L. F. (2016). Military experience and corporate tax avoidance. Review of Accounting Studies, 22(1). 141–184 doi: 10.1007/s11142-016-9373-z
  • Lazăr, S., & Istrate, C. (2018). Corporate tax-mix and firm performance. A comprehensive assessment for Romanian listed companies. Economic Research-Ekonomska Istraživanja, 31(1), 1258–1272. doi: 10.1080/1331677X.2018.1482225
  • Lee, J., & Liu, X. ( (2014). ). Competition, Capital Market Feedback, and Earnings Management: Evidence from Economic Deregulation. SSRN ELibrary.
  • Lim, Y. (2011). Tax avoidance, cost of debt and shareholder activism: Evidence from Korea. Journal of Banking and Finance, 35(2), 456–470. doi: 10.1016/j.jbankfin.2010.08.021
  • Lin, C., Officer, M. S., & Zhan, X. (2015). Does competition affect earnings management? Evidence from a natural experiment. (SSRN ELibrary).
  • Lobo, G. J., Song, M., & Stanford, M. (2012). Accruals quality and analyst coverage. Journal of Banking and Finance, 36(2), 497–508. doi: 10.1016/j.jbankfin.2011.08.006
  • Majeed, M. A., Yan, C., & Tauni, M. Z. (2018). How does competition shape managerial decisions? product market competition and financial statement comparability. Management Decision, 56(11), 2437. doi: 10.1108/MD-04-2017-0319
  • Majeed, M. A., & Zhang, X. (2016). Competitive pressure and managerial decisions product market competition and earnings quality in China. Chinese Management Studies, 10(3), 559–592.
  • Majeed, M. A., Zhang, X., & Wang, Z. (2017). Product market competition, regulatory changes, ownership structure and accounting conservatism: evidence from China. Chinese Management Studies, 11(4), 658–688.
  • Martin, S. (1993). Endogenous firm efficiency in a cournot principal-agent model. Journal of Economic Theory, 59(2), 445–450. doi: 10.1006/jeth.1993.1028
  • Mnasri, K., & Ellouze, D. (2015). Ownership structure, product market competition and productivity: Evidence from Tunisia. Management Decision, 53(8), 1771–1805. doi: 10.1108/MD-10-2014-0618
  • Neel, M. (2017). Accounting comparability and economic outcomes of mandatory IFRS adoption. Contemporary Accounting Research, 34(1), 658–690. doi: 10.1111/1911-3846.12229
  • Pinnuck, M. (2012). A review of the role of financial reporting in the global financial crisis. Australian Accounting Review, 22(1), 1–14. doi: 10.1111/j.1835-2561.2011.00155.x
  • Platikanova, P. (2017). Debt maturity and tax avoidance. European Accounting Review, 26(1), 97–124. doi: 10.1080/09638180.2015.1106329
  • Rego, S. O. (2003). Tax-avoidance activities of U.S. multinational corporations. Contemporary Accounting Research, 20(4), 805–833. doi: 10.1506/VANN-B7UB-GMFA-9E6W
  • Rego, S. O., & Wilson, R. (2012). Equity risk incentives and corporate tax aggressiveness. Journal of Accounting Research, 50(3), 775–809. doi: 10.1111/j.1475-679X.2012.00438.x
  • Richardson, G., Wang, B., & Zhang, X. (2016). Ownership structure and corporate tax avoidance: Evidence from publicly listed private firms in China. Journal of Contemporary Accounting & Economics, 12(2), 141–158. doi: 10.1016/j.jcae.2016.06.003
  • Rotemberg, J. J., & Scharfstein, S. D. (1990). Shareholder-value maximization and product-market competition. Review of Financial Studies, 3(3), 367–391. doi: 10.1093/rfs/3.3.367
  • Scharfstein, D. (1988). Product-market competition and managerial slack. The RAND Journal of Economics, 19(1), 147–155. doi: 10.2307/2555404
  • Shacklford, D. A., & Shevlin, T. (2001). Empirical tax research in accounting. Journal of Accounting and Economics, 31(1–3), 389–403.
  • Shane, P. B., Smith, D. B., & Zhang, S. ( (2014). ). Financial statement comparability and valuation of seasoned equity offerings. (SSRN ELibrary).
  • Shleifer, A. (2004). Does competition destroy ethical behavior? The American Economic Review, 94(2), 414–418. doi: 10.1257/0002828041301498
  • Slemrod, J. (2004). The economics of corporate tax selfishness. National Tax Journal, LVII(4), 877–899. doi: 10.17310/ntj.2004.4.06
  • Stickney, C. P., & McGee, V. E. (1982). Effective corporate tax rates the effect of size, capital intensity, leverage, and other factors. Journal of Accounting and Public Policy, 1(2), 125–152. doi: 10.1016/S0278-4254(82)80004-5
  • Stiebale, J. (2011). Do financial constraints matter for foreign market entry? A Firm-level examination. The World Economy, 34(1), 123–153. doi: 10.1111/j.1467-9701.2010.01306.x
  • Stigler, G. J. (1958). The economies of scale. Journal of Law and Economics, 1(2), 54–71. doi: 10.1086/466541
  • Streimikiene, D., Raheem Ahmed, R., Vveinhardt, J., Ghauri, S. P., & Zahid, S. (2018). Forecasting tax revenues using time series techniques–a case of Pakistan. Economic Research-Ekonomska Istrazivanja, 31(1), 722–754. doi: 10.1080/1331677X.2018.1442236
  • Sun, J., & Liu, G. (2011). The effect of analyst coverage on accounting conservatism. Managerial Finance, 37(1), 5–20. doi: 10.1108/03074351111092111
  • Tang, T. Y. H. (2016). Privatization, tunneling, and tax avoidance in Chinese SOEs. Asian Review of Accounting, 24(3), 274–294. doi: 10.1108/ARA-08-2014-0091
  • Wong, R. M. K., Lo, A. W. Y., & Firth, M. (2015). Managing discretionary accruals and book-tax differences in anticipation of tax rate increases: Evidence from China. Journal of International Financial Management & Accounting, 26(2), 188–222. doi: 10.1111/jifm.12027
  • Wu, P., Gao, L., Chen, Z., & Li, X. (2016). Managing reputation loss in China: In-depth analyses of financial restatements. Chinese Management Studies, 10(2), 312–345. doi: 10.1108/CMS-12-2015-0275
  • Yu, F. (2008). Analyst coverage and earnings management. Journal of Financial Economics, 88(2), 245–271. doi: 10.1016/j.jfineco.2007.05.008
  • Zahra, S. A. (1994). Unethical practices in competitive analysis: Patterns, causes and effects. Journal of Business Ethics, 13(1), 53–62. doi: 10.1007/BF00877155
  • Zhang, M., Tong, L., Su, J., & Cui, Z. (2015). Analyst coverage and corporate social performance: Evidence from China. Pacific Basin Finance Journal, 32, 76–94. doi: 10.1016/j.pacfin.2015.02.005
  • Zimmerman, J. L. (2015). The role of accounting in the twenty-first century firm. Accounting and Business Research, 45(4), 485–509. doi: 10.1080/00014788.2015.1035549