The Impact of Mandatory Deleveraging on Corporate Tax Avoidance: Evidence from a Quasi?experiment in China

Companies can use both debt and non-debt tax shields to accomplish avoidance. Using a quasi-experiment in China which the government implemented deleveraging regulations selected industries 2015, this study provides novel evidence of effect mandatory on corporate The results show that implementing leads an increase degree Mechanism analyses indicate curbs company's inclination take advantage benefits debt, but increases its tendency using shields, suggesting companies will as substitute for shields. Supplementary is more pronounced with higher financing constraints weaker enforcement, well are state owned.