The Impact Of Tax Credit Rating On Corporate Financing Constraints

Along with the Tax Credit Management Measures(Trial)issued in 2014,the tax credit rating of enterprises(A,B,M,C,D)also follows.Under the implementation of the general requirements of the Central Committee of the Chinese Communist Party on"Praising honesty and punishing dishonesty",the tax credit rating can not only motivate taxpayers to improve tax compliance,but also be applied to the market by the government in 2015.The government launched a "Bank-Tax interaction" product in cooperation with the China Banking Regulatory Commission,which was designed to transform tax credit into financing credit reasonably as well as effectively,and thus bring good news to small and micro enterprises.In 2016,the National Development and Reform Commission,the State Administration of Taxation and other departments jointly issued the Memorandum of Cooperation on Implementing Joint Incentive Measures for Class A Taxpayers,which clearly pointed out 41 joint incentive measures for class A taxpayers,including a number of financing facilitation measures.Given that,considering the problem of data availability,this paper took the data of A-share listed companies in Shanghai and Shenzhen stock markets from 2015 to 2019 as the initial sample,and combined with the list of A-level taxpayers collected manually from the State Administration of Taxation,then adopted the double difference model to empirically explore the effect and mechanism of tax credit rating results and changes on corporate financing constraints.This research not only has a novel perspective and enriches the literatures on corporate financing constraints,but also has some innovations in data and empirical tests,so it has strong theoretical and practical significance.The research shows that the improvement of tax credit rating can significantly ease the financing constraints of enterprises,while the decline of rating will bring obvious deterioration to corporate financing constraints.And this paper further shows that this effect presents diversities among enterprises with different properties,different degree of information asymmetry and different industries.On the whole,tax credit rating has a higher degree of mitigation(or aggravation)impact in private enterprises,enterprises with higher information asymmetry and labor-intensive enterprises.In addition,this paper also finds that tax credit rating acts on financing constraints through both credit financing scale and credit financing cost.The conclusions of this paper are convincing because they can stand a series of robustness tests.In a word,the research results of this paper not only provide empirical support for enterprises to improve their tax compliance,but also lay a data foundation for further research on tax credit rating in the future.In the great project of building credit China and advancing the modernization of China’s system and capacity for governance,the conclusions and recommendations of this thesis also combined the government’s tax management with corporate financing decisions,hoping to provide some useful inspirations for the future tax collection and management reform of government.