The impact of media attention on corporate tax avoidance: A study based on Chinese A-share listed companies

• Published in: Finance research letters Vol. 58; p. 104594
• Main Authors: Qi, Haozhi, Li, Muyu, zhang, Han
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.12.2023
• Subjects: Corporate tax avoidance; Internal controls; Media attention; Media attention; Corporate tax avoidance; Internal controls
• ISSN: 1544-6123; 1544-6131
• DOI: 10.1016/j.frl.2023.104594

•We test the impact and mechanism of media attention on tax avoidance.•We find media attention will significantly inhibit the tax avoidance of enterprise, especially, negative reporting on enterprises is more effective in reducing tax avoidance than positive or neutral reporting.•We find the media attention will significantly inhibit corporate tax avoidance by strengthening inner control intensity and quality of the enterprise.•We find the media attention can inhibit the corporate tax avoidance in SOEs and bigger size enterprises, however, it doesn't significant in non-SOEs and small size enterprises. By using data from China's A-share listed companies from 2018 to 2021, This article studies the impact and mechanism of media attention on corporate tax avoidance. The results show that enterprises that receive more media attention have a lower level of tax avoidance, that is, media coverage can effectively reduce the level of tax avoidance. Furthermore, negative reporting on enterprises is more effective in reducing tax avoidance than positive or neutral reporting. Mechanism analysis shows that media attention can effectively promote enterprises to enhance internal control, thereby reducing tax avoidance. The results of heterogeneity analysis show that compared to non-state-owned enterprises and smaller enterprises, media attention has a higher impact on the tax avoidance level of state-owned and large enterprises. The research conclusion of this article indicates that strengthening media attention and supervision of enterprises is an effective measure to improve corporate governance and reduce tax avoidance.