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Tax avoidance news, investor behavior, and stock market performance

Author

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  • Su, Qi
  • Deng, Yawen

Abstract

This study investigates the relationship between tax avoidance news, investor behavior, and stock market performance in the Chinese financial context. Leveraging a comprehensive dataset spanning 2020–2023, we employ regression analyses and robustness tests to examine the impact of tax avoidance news on stock market performance. This quantitative empirical study addresses a significant gap in our understanding of the financial implications of tax avoidance news in China, highlighting its substantial influence on investor decisions and market dynamics. Key findings indicate that tax avoidance news leads to increased stock price volatility, moderated by investor trading behavior. This research contributes to the literature on taxation and financial markets by offering practical insights for policymakers, investors, and corporate entities. By understanding these dynamics, stakeholders can better navigate the complexities of financial markets and enhance corporate transparency and governance. The findings underscore the importance of effective communication and ethical practices in mitigating adverse market reactions, potentially influencing regulatory reforms and investment strategies.

Suggested Citation

  • Su, Qi & Deng, Yawen, 2024. "Tax avoidance news, investor behavior, and stock market performance," Finance Research Letters, Elsevier, vol. 67(PA).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pa:s154461232400864x
    DOI: 10.1016/j.frl.2024.105834
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    More about this item

    Keywords

    Tax avoidance; Investor behavior; Stock market performance;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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