IPO Listing Review and Corporate Tax Avoidance: Evidence from the Sci-Tech Innovation Board in China
IPO Listing Review and Corporate Tax Avoidance: Evidence from the Sci-Tech Innovation Board in China
Author(s): Xiaohong Yu, Maonan Chen, Yujun Wu, Dinglun WangSubject(s): Business Economy / Management, Financial Markets, Public Finances, Accounting - Business Administration, Business Ethics, Socio-Economic Research
Published by: Vysoká škola ekonomická v Praze
Keywords: comment letters; corporate tax avoidance; IPO listing review; textual analysis; continuous difference in difference model;
Summary/Abstract: IPO listing review via comment letters is an important mechanism to improve the quality of listed firms, while its impact on corporate post-listing behaviors is not clear. This paper examines the impact of IPO listing review on corporate post-listing tax avoidance behavior using China’s Sci-Tech Innovation Board (STAR market) listed firms. Empirical tests show a significant association between increased listing review intensity and lower corporate tax avoidance. Textual analysis and mediating analysis reveal that this effect is mainly linked to comment letter questions monitoring R&D activities and compliance with operations and information disclosure. The findings support the “Bonding Hypothesis” regarding IPO listing review. Further analysis shows that the effect is more pronounced for non-state-owned firms, firms with low institutional investor shareholding, and firms listed through profitability-related criteria. The study concludes that interactions between the stock exchange and firms via comment letters during IPOs significantly monitor post-listing behavior.
Journal: Prague Economic Papers
- Issue Year: 33/2024
- Issue No: 6
- Page Range: 764-800
- Page Count: 37
- Language: English
