Anti‐Corruption and Corporate Tax Burden: Evidence from China

8 Pages Posted: 6 Oct 2020

See all articles by Yunsen Chen

Yunsen Chen

Central University of Finance and Economics (CUFE)

Dengjin Zheng

Central University of Finance and Economics

Peixin Li

Central University of Finance and Economics

Weimin Wang

Saint Louis University

Date Written: September 1, 2020

Abstract

We examine whether the Chinese government's anti‐corruption enforcement reduces corporate tax burdens. Using a difference‐in‐difference approach, we find tax burdens of firms located in corrupt political leaders’ jurisdictions are lower after these leaders were deposed. An analysis of two tax policy changes shows that the reduction in tax burden is more pronounced when corrupt politicians had more power in levying taxes.

Suggested Citation

Chen, Yunsen and Zheng, Dengjin and Li, Peixin and Wang, Weimin, Anti‐Corruption and Corporate Tax Burden: Evidence from China (September 1, 2020). International Review of Finance, Vol. 20, Issue 3, pp. 781-788, 2020, Available at SSRN: https://ssrn.com/abstract=3704863 or http://dx.doi.org/10.1111/irfi.12226

Yunsen Chen

Central University of Finance and Economics (CUFE) ( email )

39 South College Road
Haidian District
Beijing, Beijing 100081
China

HOME PAGE: http://yunsenchen.weebly.com/

Dengjin Zheng (Contact Author)

Central University of Finance and Economics ( email )

39 South College Road
Haidian District
Beijing, Beijing 100081
China

Peixin Li

Central University of Finance and Economics

Weimin Wang

Saint Louis University ( email )

63103

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