Ownership Concentration, State Ownership, and Effective Tax Rates: Evidence from China’s Listed Firms?

摘要

This paper examines the effect of ownership concentration and state ownership on the tax reporting practices of China’s publicly listed firms. I argue that ownership concentration and state ownership are important for tax reporting practices in China because listed firms have high ownership concentrations and high levels of state ownership. Using a sample of 758 listed Chinese firms over the 1998–2008 time period, I find that firms with concentrated share ownership have lower effective tax rates. I also find that firms whose largest shareholders are government-related have higher effective tax rates compared to firms whose largest shareholders are nongovernment related. In other words, the nature of the largest shareholder (government vs. nongovernment) matters. I also show that ownership-concentrated firms are able to achieve preferential statutory tax rates compared to firms with low ownership concentration regardless of the identity of the largest shareholder.