Short-sale deregulation and corporate tax aggressiveness: evidence from the Chinese market

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dc.contributor.author Cao, Yue
dc.contributor.author Dong, Yizhe
dc.contributor.author Guo, Tianxiao
dc.contributor.author Ma, Diandian
dc.date.accessioned 2021-09-17T03:28:04Z
dc.date.available 2021-09-17T03:28:04Z
dc.date.issued 2021-7-30
dc.identifier.citation European Journal of Finance 1-30 30 Jul 2021
dc.identifier.issn 1351-847X
dc.identifier.uri https://hdl.handle.net/2292/56570
dc.description.abstract We study whether short selling affects corporate tax aggressiveness. Exploiting staggered short-sale deregulation in the Chinese stock market as a source of variation in market pressure and monitoring, our difference-in-differences estimates show that the introduction of a short-selling scheme significantly discourages pilot firms from engaging in aggressive tax avoidance, in contrast to the findings by Luo, Ni, and Tian (2020. “Short Selling and Corporate Tax Avoidance: Insights from a Financial Constraint View.” Pacific–Basin Finance Journal 61: 101323.). We also find that the negative effect of short selling on tax aggressiveness is more pronounced for firms that have high advertising costs, high institutional holdings, and CEO duality, and are located in regions with weak tax law enforcement. We further reveal that short selling has an indirect effect on tax aggressiveness through the additional external pressure exerted by auditors, media, and financial analysts, and lastly, challenge the main analysis by Luo, Ni, and Tian (2020). Our evidence highlights the monitoring and disciplinary roles that short sellers play in determining the level of corporate tax aggressiveness.
dc.language en
dc.publisher Informa UK Limited
dc.relation.ispartofseries European Journal of Finance
dc.rights Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher.
dc.rights.uri https://researchspace.auckland.ac.nz/docs/uoa-docs/rights.htm
dc.rights.uri https://authorservices.taylorandfrancis.com/research-impact/sharing-versions-of-journal-articles/
dc.subject 1502 Banking, Finance and Investment
dc.title Short-sale deregulation and corporate tax aggressiveness: evidence from the Chinese market
dc.type Journal Article
dc.identifier.doi 10.1080/1351847x.2021.1958890
pubs.begin-page 1
dc.date.updated 2021-08-12T22:20:10Z
dc.rights.holder Copyright: Informa UK Limited en
pubs.end-page 30
pubs.publication-status Published online
dc.rights.accessrights http://purl.org/eprint/accessRights/RetrictedAccess en
pubs.subtype Journal Article
pubs.elements-id 862483
dc.identifier.eissn 1466-4364
pubs.online-publication-date 2021-7-30


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