The purpose of this paper is to investigate the effects of corporate dispersion on tax avoidance from geographical and institutional dispersion perspectives by using evidence from China.
Using a panel data of Chinese listed firms during 2003-2015, this paper estimates with correlation analysis and multiple regression analysis.
Both geographical and institutional dispersion are negatively associated with the degree of corporate tax avoidance. Furthermore, corporate governance mechanisms and female chief executive officers can mitigate the negative relation between corporate dispersion and tax avoidance. The results also indicate that ineffective internal control is one of the channels through which corporate dispersion reduces tax avoidance.
This is the first paper about the impact of firm dispersion on the degree of tax avoidance, complementing the research content of diversification and corporate decision-making.
This study was supported by the National Natural Science Foundation of China (71773088, 71402141, 71572144, 71102095, 71502138), The Key Research Projects of Philosophy and Social Sciences of the Ministry of Education (18JZD035), Shaanxi Natural Science Foundation of China (2015JQ7281).
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