Abstract
To the extent that taxation impacts firms’ bottom line, the textbook argument that tax imposes a burden on firms has been subject to extensive research. However, compared with research on developed markets, especially the US, studies of tax management on the emerging markets, including China, are limited.
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Notes
- 1.
From a theoretical perspective, the most common application of mediation is to explain why a relationship between two constructs exists. When exogenous constructs are viewed as “inputs” to a model explaining some final “outcomes” that is represented by an endogenous construct, then, any construct acting between them shall involve some mediation (Black, Babin, & Anderson, 2009, pp. 766–770).
- 2.
The CSMAR database is developed by Shenzhen GTA Information Technology Corporation Limited. Co., Ltd., and designed by the China Accounting and Finance Research Centre of the Hong Kong Polytechnic University.
- 3.
All stocks labeled ST have seen their business in the red for two consecutive years representing the firms with financial problem or other abnormal conditions, which are technically on the brink of delisting. ST or Special Treatment shares and the original idea behind this classification is that it would act as a warning to investors.
- 4.
To make the ETRs more interpretable, the study winsorized the ETRs at 0 and 1. Specifically, the study excluded the firms with negative corporate income tax expenses or with so high corporate income tax expenses exceed pre-tax income, because they would lead to non-meaningful ETR and confounding effects.
- 5.
For bootstrapping percentile and bias-corrected methods, and Mackinnon PRODCLIN2, if zero is not between the lower and upper bound, then the effect is nonzero with 95% confidence (Hayes, 2009). Percentile and bias-corrected methods were used to identify the existence of indirect effects. Then, Mackinnon PRODCLIN2 was used to identify and distinguish the specific indirect effects.
- 6.
In Table 3.8, because zero is not contained in the interval between lower and upper bound, the specific indirect effects can be distinguished in terms of magnitude.
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Zhang, C., Rasiah, R., Cheong, K.C. (2019). Corporate Governance and Firm Performance. In: Governing Corporate Tax Management. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-9829-2_3
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