CEO hometown ties and tax avoidance-evidence from China's listed firms

Yu Shen, Di Gao, Di Bu, Lina Yan*, Ping Chen

*Corresponding author for this work

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

This study investigates the effects of CEO hometown ties on corporate tax avoidance. The results show that CEO hometown ties to local government officials have a significantly positive impact on tax avoidance for private firms in China. We also find that the hometown ties effect is more pronounced in cities with weak public governance and in cities whose municipal Party committee secretaries are promoted from the same city, whereas the effect is weak in cities whose municipal Party committee secretaries are transferred from other places. In summary, our results suggest that hometown ties as an important political resource can facilitate connected private firms to obtain more economic resources from government.

Original languageEnglish
Pages (from-to)1549-1580
Number of pages32
JournalAccounting and Finance
Volume58
Issue number5
DOIs
Publication statusPublished - 1 Mar 2019

Keywords

  • Hometown ties
  • Identity
  • Private enterprises
  • Tax avoidance

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