| As a principal, Institutional investors concern the decision-making enterprise of managers. Tax behavior is an important aspect of corporate financial decisions. Domestic research on institutional investors and corporate tax avoidance is still in its infancy. However, institutional investors play a more important role in China’s capital markets. The impact of institutional investors on corporate tax avoidance is valuable to consider.Based on the research results from China and abroad, this paper attempts to set a regression model applying principal-agent theory. Tax evasion capital structure is set as explained variable, and the proportion of institutional investors is set as explanatory variable. Firstly, the paper examines the impact of the proportion of institutional investors on corporate tax evasion using the panel data regression based on the financial information of China’s listed companies in2009and2012as a whole. Secondly, the paper introduces different types of institutional investors to test whether this factor has a significant impact. Finally, the paper proposes policy recommendations to improve our capital market and the tax system.This paper includes four parts:The first part is made of the first two chapters, introducing the research background, research frame, research methods, and theories reviewed. The second chapter is the second part of this article.In this part, the paper make definitions of the concept of institutional investors and corporate tax avoidance.Then, the relationship between corporate tax avoidance is discussed according to principal-agent theory. The third part of this article includes the fourth and fifth chapters. Applying regression model, the impact of institutional investors on corporate tax avoidance is discussed. The fourth part is the sixth chapter of this paper. Based on theoretical analysis and empirical analysis the paper comes to conclusions and makes recommendations to o improve our capital market and the tax system. |
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