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

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 i...

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Bibliographic Details
Published inAccounting and finance (Parkville) Vol. 58; no. 5; pp. 1549 - 1580
Main Authors Shen, Yu, Gao, Di, Bu, Di, Yan, Lina, Chen, Ping
Format Journal Article
LanguageEnglish
Published Clayton Blackwell Publishing Ltd 01.03.2019
Subjects
Chief executive officers
Corporate taxes
Favoritism
Hometown ties
Identity
Private enterprises
Tax avoidance
China
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Summary: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.
ISSN:0810-5391
1467-629X
DOI:10.1111/acfi.12442