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Is corporate digital transformation a tax haven?

Author

Listed:
  • Wanyi Chen
  • Fanli Meng

Abstract

Purpose - Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax authorities can identify this behavior. Design/methodology/approach - Using data on listed companies on the Shanghai and Shenzhen Stock Exchanges from 2008 to 2020, this study applies the Heckman two-stage and cross-section models. Findings - The results show that the higher the degree of CDT, the more aggressive the tax avoidance behavior. The CDT's impact on corporate tax avoidance is more significant under strong government tax efforts. Originality/value - This study expands research on the economic consequences of CDT and the factors influencing corporate tax avoidance behavior. Moreover, it has important implications for governments to monitor tax avoidance behavior under the CDT, improve digital tax systems, and pay more attention to the tax administration of digital assets.

Suggested Citation

  • Wanyi Chen & Fanli Meng, 2023. "Is corporate digital transformation a tax haven?," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 20(2), pages 304-333, May.
    • Handle: RePEc:eme:ijmfpp:ijmf-11-2022-0505
    DOI: 10.1108/IJMF-11-2022-0505
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    More about this item

    Keywords

    Corporate digital transformation; Corporate tax avoidance; Tax effort; Tax management; Tax haven; G10; G23; G30;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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