The impact of tax avoidance on enterprise investment efficiency
2018
AbstractFocusing 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.
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