Skip to main content
Fachgebiete
Automobil + Motoren Bauwesen + Immobilien Business IT + Informatik Elektrotechnik + Elektronik Energie + Nachhaltigkeit Finance + Banking Management + Führung Marketing + Vertrieb Maschinenbau + Werkstoffe Versicherung + Risiko
DE
EN
Themenseiten
Organisationspsychologie Projektmanagement Marketing Smart Manufacturing
Bücher
Zeitschriften
Weitere Formate
Podcasts Webinare Technik Webinare Wirtschaft Kongresse Veranstaltungskalender Awards
Jetzt Einzelzugang starten
Zugang für Unternehmen
Referenzkunden
MTZ-Fachkongress

Antriebe und Energiesysteme von morgen


Austausch von Automobil- und Energiewirtschaft

Am 14./15. Mai geht es in Chemnitz um die Mobilitätswende durch Elektro- und Wasserstofffahrzeuge.
Erweiterte Suche
Anmelden
nach oben
Journal of Business Ethics
Erschienen in: Journal of Business Ethics 3/2020

02.01.2019 | Original Paper

Political Status and Tax Haven Investment of Emerging Market Firms: Evidence from China

verfasst von: Ziliang Deng, Jiayan Yan, Pei Sun

Erschienen in: Journal of Business Ethics | Ausgabe 3/2020

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config
loading …

Abstract

Tax haven investment has become an increasingly important topic in business ethics. Given the considerable tax haven investments from emerging market firms, understanding how home-country institutions shape their investments in tax havens is theoretically intriguing and practically crucial. By integrating resource dependence and institutional theories, we hypothesize the existence of a negative relationship between firms’ home-country political status and tax haven investment. State-owned enterprises (SOEs) controlled by the central government dominate the political hierarchy. Compared with other types of enterprises, central SOEs receive the strongest institutional support and are the most prone to institutional oversight, thereby exhibiting the weakest tendency to invest in tax havens. This top group is followed by SOEs controlled by local governments, politically connected private firms, and private firms without political connections. These groups exhibit an increasing tendency to invest in overseas tax havens. The empirical analysis of Chinese listed firms during 2003–2013 supports our hypotheses. This research contributes to the business ethics literature by identifying institutional drivers of overseas tax haven investment by emerging market firms, thereby adding to the ethical debate on international tax avoidance.
Vorheriger Artikel Different Drivers: Exploring Employee Involvement in Corporate Philanthropy
Nächster Artikel State Pension Funds and Corporate Social Responsibility: Do Beneficiaries’ Political Values Influence Funds’ Investment Decisions?

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

Jetzt informieren
Anhänge
Nur mit Berechtigung zugänglich
Fußnoten
1
The annual consequent corporate income tax loss is estimated to be roughly USD100–240 billion, which is equivalent to 4–10% of the global corporate income taxes (OECD 2017). In June 2018, 115 countries have joined the OECD/G20 multilateral coordination framework, representing 95% of global GDP (OECD 2018).
 
2
They include Bahamas, British Virgin Islands, Isle of Man, Guernsey, Jersey, Bermuda, Argentina, Cayman Islands, San Marino, and Liechtenstein.
 
3
All historical Chinese OFDI in tax havens accounted for nearly 78% of the value of all Chinese OFDI during 1980–2016. Hong Kong (57.5%), the Cayman Islands (7.7%), the British Virgin Islands (6.5%), and Singapore (2.5%) were the top four destinations (Ministry of Commerce of China 2017).
 
4
Some auxiliary empirical results not reported for brevity, but they are available upon request.
 
Literatur
Adhikari, A., Derashid, C., & Zhang, H. (2006). Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia. Journal of Accounting and Public Policy, 25(5), 574–595.
Akamah, H., Hope, O.-K., & Thomas, W. B. (2018). Tax havens and disclosure aggregation. Journal of International Business Studies, 49(1), 49–69.
Al Karaawy, N. A. A., & Al Baaj, Q. M. A. (2018). Taxation of international business organizations. Academy of Accounting and Financial Studies Journal, 22(1), 1–16.
Allred, B. B., Findley, M. G., Nielson, D., & Sharman, J. C. (2017). Anonymous shell companies: A global audit study and field experiment in 176 countries. Journal of International Business Studies, 48(5), 596–619.
Bhanji, Z., & Oxley, J. E. (2013). Overcoming the dual liability of foreignness and privateness in international corporate citizenship partnerships. Journal of International Business Studies, 44(4), 290–311.
Blau, B. M., Brough, T. J., & Thomas, D. W. (2013). Corporate lobbying, political connections, and the bailout of banks. Journal of Banking & Finance, 37(8), 3007–3017.
Bliss, C. I. (1934). The method of probits. Science, 79, 38–39.
Boddewyn, J. J., & Brewer, T. L. (1994). International-business political behavior: New theoretical directions. Academy of Management Review, 19(1), 119–143.
Boisot, M., & Meyer, M. W. (2015). Which way through the open door? Reflections on the internationalization of Chinese firms. Management and Organization Review, 4(3), 349–365.
Brockman, P., Rui, O. M., & Zou, H. (2013). Institutions and the performance of politically connected M&As. Journal of International Business Studies, 44(8), 833–852.
Buckley, P. J., Clegg, L. J., Cross, A. R., Liu, X., Voss, H., & Zheng, P. (2007). The determinants of Chinese outward foreign direct investment. Journal of International Business Studies, 38(4), 499–518.
Buckley, P. J., Sutherland, D., Voss, H., & Elgohari, A. (2015). The economic geography of offshore incorporation in tax havens and offshore financial centres: The case of Chinese MNEs. Journal of Economic Geography, 15(1), 103–128.
Chang, S. J., & Xu, D. (2008). Spillovers and competition among foreign and local firms in China. Strategic Management Journal, 29(5), 495–518.
Chari, M., & Acikgoz, S. (2016). What drives emerging economy firm acquisitions in tax havens? Journal of Business Research, 69(2), 664–671.
Chinn, M. D., & Ito, H. (2006). What matters for financial development? Capital controls, institutions, and interactions. Journal of Development Economics, 81(1), 163–192.
Chizema, A., Liu, X., Lu, J., & Gao, L. (2015). Politically connected boards and top executive pay in Chinese listed firms. Strategic Management Journal, 36(6), 890–906.
Choudhury, P., & Khanna, T. (2014). Toward resource independence—why state-owned entities become multinationals: An empirical study of India’s public R&D laboratories. Journal of International Business Studies, 45(8), 943–960.
Contractor, F. J. (2016). Tax avoidance of multinational companies: Methods, policies, and ethics. AIB Insights, 16(2), 10–13.
Cui, L., & Jiang, F. (2012). State ownership effect on firms’ FDI ownership decisions under institutional pressure: A study of Chinese outward-investing firms. Journal of International Business Studies, 43(3), 264–284.
Deng, Z., Jean, R.-J. B., & Sinkovics, R. R. (2017). Rapid expansion of international new ventures across institutional distance. Journal of International Business Studies, 49(8), 1010–1032.
Deng, Z., Yan, J., & van Essen, M. (2018). Heterogeneity of political connections and outward foreign direct investment. International Business Review, 27(4), 893–903.
Dharmapala, D., & Hines, J. R. J. (2009). Which countries become tax havens? Journal of Public Economics, 93(9–10), 1058–1068.
Dowell, G., & Killaly, B. (2009). Effect of resource variation and firm experience on market entry decisions: Evidence from U.S. Telecommunication firms’ international expansion decisions. Organization Science, 20(1), 69–84.
Dyreng, S. D., & Lindsey, B. P. (2009). Using financial accounting data to examine the effect of foreign operations located in tax havens and other countries on U.S. Multinational firms’ tax rates. Journal of Accounting Research, 47(5), 1283–1316.
Emerson, R. M. (1962). Power-dependence relations. American Sociological Review, 27(1), 31–41.
Faccio, M. (2006). Politically connected firms. American Economic Review, 96(1), 369–386.
Fan, J. P. H., Wong, T. J., & Zhang, T. (2007). Politically connected CEOs, corporate governance, and post-IPO performance of China’s newly partially privatized firms. Journal of Financial Economics, 84(2), 330–357.
Fan, G., Wang, X., & Zhu, H. (2011). NERI index of marketization of China’s provinces 2011 report. Beijing: Economic Science Press (in Chinese).
Fung, H.-G., Yau, J., & Zhang, G. (2011). Reported trade figure discrepancy, regulatory arbitrage, and round-tripping: Evidence from the China–Hong Kong trade data. Journal of International Business Studies, 42(1), 152–176.
Galaz, V., Crona, B., Dauriach, A., Jouffray, J.-B., Österblom, H., & Fichtner, J. (2018). Tax havens and global environmental degradation. Nature Ecology & Evolution, 2, 1352–1357.
Gokalp, O. N., Lee, S.-H., & Peng, M. W. (2017). Competition and corporate tax evasion: An institution-based view. Journal of World Business, 52(2), 258–269.
Gravelle, J. G. (2009). Tax havens: International tax avoidance and evasion. National Tax Journal, 62(4), 727–753.
Grubert, H. (1998). Taxes and the division of foreign operating income among royalties, interest, dividends and retained earnings. Journal of Public Economics, 68(2), 269–290.
Guillén, M. F. (2000). Business groups in emerging economies: A resource-based view. Academy of Management Journal, 43(3), 362–380.
Hasan, I., Hoi, C. K., Wu, Q., & Zhang, H. (2017). Does social capital matter in corporate decisions? Evidence from corporate tax avoidance. Journal of Accounting Research, 55(3), 629–668.
He, X., Eden, L., & Hitt, M. A. (2016a). The renaissance of state-owned multinationals. Thunderbird International Business Review, 58(2), 117–129.
He, X., Eden, L., & Hitt, M. A. (2016b). Shared governance: Institutional investors as a counterbalance to the state in state owned multinationals. Journal of International Management, 22(2), 115–130.
Hines, J. R. Jr., & Rice, E. M. (1994). Fiscal paradise: Foreign tax havens and American business. Quarterly Journal of Economics, 109(1), 149–182.
Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. (2000). Strategy in emerging economies. Academy of Management Journal, 43(3), 249–267.
Huang, Y. (2003). Selling China: Foreign direct investment during the reform era. New York: Cambridge University Press.
Jones, C., & Temouri, Y. (2016). The determinants of tax haven FDI. Journal of World Business, 51(2), 237–250.
Kanagaretnam, K., Lee, J., Lim, C. Y., & Lobo, G. J. (2018). Cross-country evidence on the role of independent media in constraining corporate tax aggressiveness. Journal of Business Ethics, 150(3), 879–902.
Khwaja, A. I., & Mian, A. (2005). Do lenders favor politically connected firms? Rent provision in an emerging financial market. Quarterly Journal of Economics, 120(4), 1371–1411.
Klassen, K. J., & Laplante, S. K. (2012). The effect of foreign reinvestment and financial reporting incentives on cross-jurisdictional income shifting. Contemporary Accounting Research, 29(3), 928–955.
Li, M. H., Cui, L., & Lu, J. (2014). Varieties in state capitalism: Outward FDI strategies of central and local state-owned enterprises from emerging economy countries. Journal of International Business Studies, 45(8), 980–1004.
Liang, H., Ren, B., & Sun, S. L. (2014). An anatomy of state control in the globalization of state-owned enterprises. Journal of International Business Studies, 46(2), 223–240.
Liu, G. S., Sun, P., & Woo, W. T. (2006). The political economy of Chinese-style privatization: Motives and constraints. World Development, 34(12), 2016–2033.
Lu, J., Liu, X., Wright, M., & Filatotchev, I. (2014). International experience and FDI location choices of Chinese firms: The moderating effects of home country government support and host country institutions. Journal of International Business Studies, 45(4), 428–449.
Lü, X., & Landry, P. F. (2014). Show me the money: Interjurisdiction political competition and fiscal extraction in China. American Political Science Review, 108(3), 706–722.
Ma, X. F., Tong, T. W., & Fitza, M. (2013). How much does subnational region matter to foreign subsidiary performance? Evidence from Fortune Global 500 corporations’ investment in China. Journal of International Business Studies, 44(1), 66–87.
Markle, K. (2016). A comparison of the tax-motivated income shifting of multinationals in territorial and worldwide countries. Contemporary Accounting Research, 33(1), 7–43.
Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D. (2016). A review of the nonmarket strategy literature: Toward a multi-theoretical integration. Journal of Management, 42(1), 143–173.
Meyer, K. E., Ding, Y., Li, J., & Zhang, H. (2014). Overcoming distrust: How state-owned enterprises adapt their foreign entries to institutional pressures abroad. Journal of International Business Studies, 45(8), 1005–1028.
Ministry of Commerce of China (2017). Statistical bulletin of Chinese OFDI. Beijing: Ministry of Commerce of China
Morck, R., Yeung, B., & Zhao, M. (2008). Perspectives on China’s outward foreign direct investment. Journal of International Business Studies, 39(3), 337–350.
OECD. (2000). Towards global tax co-operation: Progress in identifying and eliminating harmful tax practices. Paris: OECD.
OECD. (2017). Background brief: Inclusive framework on BEPS. Paris: OECD.
OECD. (2018). OECD/G20 inclusive framework on BEPS progress report july 2017-june 2018. Paris: OECD.
Park, S. H., Li, S., & Tse, D. K. (2006). Market liberalization and firm performance during China’s economic transition. Journal of International Business Studies, 37(1), 127–147.
Payne, D. M., & Raiborn, C. A. (2018). Aggressive tax avoidance: A conundrum for stakeholders, governments, and morality. Journal of Business Ethics, 147(3), 469–487.
Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. Stanford: Stanford University Press.
Poncet, S., Steingress, W., & Vandenbussche, H. (2010). Financial constraints in China: Firm-level evidence. China Economic Review, 21(3), 411–422.
Ralston, D. A., Terpstra-Tong, J., Terpstra, R. H., Wang, X., & Egri, C. (2006). Today’s state-owned enterprises of China: Are they dying dinosaurs or dynamic dynamos? Strategic Management Journal, 27(9), 825–843.
Saunders, A., Strock, E., & Travlos, N. G. (1990). Ownership structure, deregulation, and bank risk taking. Journal of Finance, 45(2), 643–654.
Sikka, P. (2016). Big four accounting firms: Addicted to tax avoidance. In Pioneers of critical accounting (pp. 259–274). London: Palgrave Macmillan
Sun, P., Hu, H. W., & Hillman, A. J. (2016). The dark side of board political capital: Enabling blockholder rent appropriation. Academy of Management Journal, 59(5), 1801–1822.
Sun, P., Mellahi, K., & Wright, M. (2012). The contingent value of corporate political ties. Academy of Management Perspectives, 26(3), 68–82.
Sun, P., Mellahi, K., Wright, M., & Xu, H. (2015). Political tie heterogeneity and the impact of adverse shocks on firm value. Journal of Management Studies, 52(8), 1036–1063.
Sun, P., Qu, Z., & Liao, Z. (2018). How and when do subnational institutions matter for R&D investment? Evidence from the Chinese pharmaceutical sector. IEEE Transactions on Engineering Management, 65(3), 379–391.
Sutherland, D., & Ning, L. (2011). Exploring ‘onward-journey’ odi strategies in China’s private sector businesses. Journal of Chinese Economic and Business Studies, 9(1), 43–65.
Tobin, J. (1958). Estimation of relationships for limited dependent variables. Econometrica, 26(1), 24–36.
UNCTAD (2011). World investment report 2011: Non-equity modes of international production and development. Geneva: United Nations Conference on Trade and Development.
UNCTAD (2015). World investment report 2015: Reforming international investment governance. Geneva: United Nations Conference on Trade and Development.
Wang, C., Hong, J., Kafouros, M., & Wright, M. (2012). Exploring the role of government involvement in outward FDI from emerging economies. Journal of International Business Studies, 43(7), 655–676.
Witt, M. A., & Lewin, A. Y. (2007). Outward foreign direct investment as escape response to home country institutional constraints. Journal of International Business Studies, 38(4), 579–594.
World Bank (2016b). Doing business 2016: Measuring regulatory quality and efficiency. Washington, DC: World Bank
Wu, W., Rui, O. M., & Wu, C. (2013). Institutional environment, ownership and firm taxation. Economics of Transition, 21(1), 17–51.
Wu, W., Wu, C., Zhou, C., & Wu, J. (2012). Political connections, tax benefits and firm performance: Evidence from China. Journal of Accounting and Public Policy, 31(3), 277–300.
Xu, D., Lu, J. W., & Gu, Q. (2014). Organizational forms and multi-population dynamics: Economic transition in China. Administrative Science Quarterly, 59(3), 517–547.
Xu, N., Xu, X., & Yuan, Q. (2013). Political connections, financing friction, and corporate investment: Evidence from Chinese listed family firms. European Financial Management, 19(4), 675–702.
Zou, H., & Adams, M. B. (2008). Corporate ownership, equity risk and returns in the People’s Republic of China. Journal of International Business Studies, 39(7), 1149–1168.
Metadaten
Titel
Political Status and Tax Haven Investment of Emerging Market Firms: Evidence from China
verfasst von
Ziliang Deng
Jiayan Yan
Pei Sun
Publikationsdatum
02.01.2019
Verlag
Springer Netherlands
Erschienen in
Journal of Business Ethics / Ausgabe 3/2020
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI
https://doi.org/10.1007/s10551-018-4090-0

Weitere Artikel der Ausgabe 3/2020

Journal of Business Ethics 3/2020 Zur Ausgabe

Original Paper

A Case Study of Micro Businesses in Jelutong Wet Market in Penang, Malaysia: Implications for CSR Scholarship

Original Paper

Assessing the Non-financial Outcomes of Social Enterprises in Luxembourg

Original Paper

Global Framework Agreements and Trade Unions as Monitoring Agents in Transnational Corporations

Original Paper

A Systematic Review of the Bottom/Base of the Pyramid Literature: Cumulative Evidence and Future Directions

Original Paper

CSR Beyond Economy and Society: A Post-capitalist Approach

Original Paper

State Pension Funds and Corporate Social Responsibility: Do Beneficiaries’ Political Values Influence Funds’ Investment Decisions?

Premium Partner

    Bildnachweise