The Decomposed Effect of Tax Avoidance on R&D – Empirical Research Based on SEM
- https://doi.org/10.2991/aebmr.k.201128.076How to use a DOI?
- Tax avoidance, research and development, structural equation model, perks, tunnelling
With the rapid development of Chinese society and the gradual rise of emerging industries, R&D and innovation are increasingly becoming the fundamental driving force leading enterprises to compete and grow. The 18th National Congress of the Communist Party of China put forward the strategy of innovation-driven development, which once again emphasized the importance of innovation to the country’s destiny. For enterprises, an important factor affecting innovation activities is capital. Reasonable tax avoidance accumulates a large amount of capital for enterprises through cash flow saving effect and signalling effect, which meets the high demand of technological innovation for capital and promotes enterprises to actively expand the scale of R&D. In this paper, the structural equation model is constructed, and the total effect of tax avoidance on enterprise innovation is evaluated. Besides, the total effect is decomposed and evaluated as well, founding that tax avoidance by increasing the company’s cash holdings level forms a positive direct impact, but tax avoidance by increasing management and large shareholder’s opportunism behaviours also forms a remarkable negative indirect effect. This study is of great significance for the company to build a perfect governance mechanism, alleviate the conflict of interests of all parties, carry out tax planning rationally, and increase R&D.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Nuo Li PY - 2020 DA - 2020/11/30 TI - The Decomposed Effect of Tax Avoidance on R&D – Empirical Research Based on SEM BT - Proceedings of the 2020 2nd International Conference on Economic Management and Cultural Industry (ICEMCI 2020) PB - Atlantis Press SP - 391 EP - 396 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.201128.076 DO - https://doi.org/10.2991/aebmr.k.201128.076 ID - Li2020 ER -