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Corporate dispersion and tax avoidance

Kun Su (School of Management, Northwestern Polytechnical University, Xi’an, China)
Bin Li (School of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, China)
Chen Ma (School of Economics and Management, Northwest University, Xi’an, China)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 12 March 2019

Issue publication date: 31 July 2019

Abstract

Purpose

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.

Design/methodology/approach

Using a panel data of Chinese listed firms during 2003-2015, this paper estimates with correlation analysis and multiple regression analysis.

Findings

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.

Originality/value

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.

Keywords

Acknowledgements

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).

Citation

Su, K., Li, B. and Ma, C. (2019), "Corporate dispersion and tax avoidance", Chinese Management Studies, Vol. 13 No. 3, pp. 706-732. https://doi.org/10.1108/CMS-04-2018-0497

Publisher

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Emerald Publishing Limited

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