State Ownership, Tax Status, and Size Effect of Effective Tax Rate in China

State Ownership, revenue Status, and Size Effect of Effective evaluate Rate in China Liansheng Wu Yaping Wang Paul Gillis Wei Luo Guanghua School of Management, Peking University crimp This paper examines how profligate surface, state ownership and tax location jointly affect effective tax rank. It is found that when firms do not enjoy a preferential tax status, firm size is positively correlated with effective tax rates for privately controlled firms and negatively correlated for state-controlled firms. Whether state-controlled firms have high or lower taxes than those non-state controlled firms depends on the firm size. For those firms that already enjoy a preferential tax status, there is no significant relationship surrounded by their size and their tax burdens. Keywords: man policy; Effective tax rate; Corporate plaque; Chinese economy JEL classification: G38; H25; K34; M48 1. Introduction The relationship between firm size and effective tax rate (ETR) is so important that it has received a considerable amount of interest. It has implications to the brass of corporate tax policy and tax law (Spooner, 1986; Callihan, 1994). Tax policy makers use the size-ETR relationship when assessing the impact of tax laws. intimacy groups use it to affect the formation and change of tax policy.

deuce conflicting views about the relationship of firm size to ETR argon presented in extant literature. According to the political power opening (Salamon and Siegfried, 1977), firm size and ETR are negatively correlated, while the political cost theory (Watts and Zimmerman, 1986) suggests that larger firms pay higher taxes. The experimental evidence of the relationship between firm size and ETRs is overly mixed. Zimmerman (1983) finds that the fifty largest US firms in his sample experienced higher ETRs from 1969 to 1981. Rego (2003) examines 19,737 US corporations during 1990-1997 and finds the opposite relationship between firm size and ETR. Many researchers use international data and also... If you want to suck a full essay, order it on our website: Ordercustompaper.com

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