Banking deregulation and corporate tax avoidance

Externalities of Corporate Tax Avoidance

We show that when a meaningful proportion of firms in an economy engage in tax avoidance strategies, the covariance between a firm’s cash flow and the market cash flows increases, thereby increasing a firm’s cost of capital. This negative externality is imposed on all firms in the economy, not just tax-avoiding firms. The negative externality results regardless of the level of uncertainty assoc...

Tax Avoidance , Corporate Transparency , and Firm Value

The Ranking of Effective Factors on Corporate Tax Avoidance

The Hierarchy of Effective Factors on Corporate Tax Avoidance Because of the information asymmetry within taxpayers and governments, commonly, the taxpayers try avoid the payment of tax. The problem can be explained by Agency theory. On the other hand, governmants try to maximize receiving tax by recognizing risky taxpayers and researchers try to recognize effective factors on tax avoidance. Th...

Competition and Corporate Tax Avoidance: Evidence from Chinese Industrial Firms*

This article investigates whether market competition enhances the incentives of Chinese industrial firms to avoid corporate income tax. We estimate the effects of competition on the relationship between firms reported accounting profits and their imputed profits based on the national income account. To cope with measurement errors and potential endogeneity, we use instrumental variables, exogen...

Banking Deregulation in Indonesia

In late 1988, the Indonesian government adopted a number of reforms aimed at deregulating the country's banking sector.' Since the reforms, Indonesia's banking system has been undergoing a transformation from an inefficient system dominated by a relatively small number of state-owned banks, to a more volatile system, in which competition among state and privately owned banks is encouraged.' Thi...