Social Security Fund Shareholding And Corporate Tax Avoidance

Financial taxation is a national plan related to the people’s livelihood of the society and an important pillar to realize macro-control and maintain social stability.The loss of tax revenue will cause the loss of fiscal revenue,which will in turn aggravate the fiscal deficit,distort public resources,and even affect the national governance ability and smooth socio-economic development.Corporate tax avoidance,as a kind of tax planning under the purpose of tax evasion,is common among listed companies all over the world,and irregular tax avoidance may develop into illegal acts such as tax evasion and tax evasion,and even endanger the normal economic order of the country.Therefore,all sectors of society actively explore effective ways to govern corporate tax avoidance,among which external governance is an important part of the governance mechanism,and institutional investors,as important members of external governance,also play a great role in the governance of corporate tax avoidance.Institutional investors are heterogeneous in investment,and the degree of their role varies depending on their nature,while the social security fund,as the "national team" among institutional investors,is responsible for the stable development of social security infrastructure,which is related to people’s personal interests,and has a large investment scale and high status,and its investment operation management has been widely concerned.At the same time,as a long-term institutional investor,the social security fund will pay attention to the governance level of its shareholding companies and participate in corporate governance for the purpose of long-term asset preservation and appreciation,so whether the shareholding of social security funds can effectively manage the tax avoidance issue needs further in-depth study.On this basis,this paper uses dual principal-agent theory,information asymmetry theory,signaling theory,and investor relationship theory as the theoretical basis,and selects the unbalanced panel data of 3310 listed companies in A-shares from 2011 to 2018 as a sample,and uses a fixed-effects model to explore the impact of social security fund shareholding on corporate tax avoidance behavior,and the study finds that social security fund shareholding in listed companies can effectively inhibit corporate tax avoidance behavior.In terms of influence ways,this paper finds that the shareholding of social security fund can effectively restrain enterprise tax avoidance by alleviating the principal-agent problems within enterprises,improving the information transparency between enterprises and external investors,and reducing the financing constraints faced by enterprises.Through group regression,the regulating role of equity nature,the intensity of tax collection and administration and the level of corporate governance are proved,that is,in state-owned enterprises,enterprises with high tax collection and administration intensity and low level of corporate governance,the inhibitory effect of social security fund is more significant.In this paper,we use the PSM-DID method to test the possible endogeneity of social security fund holdings and corporate tax avoidance,and perform robustness tests in various ways,and the results remain significant after mitigating the endogeneity and robustness issues,proving the robustness of the findings.The paper further investigates the economic consequences of social security fund shareholding to inhibit corporate tax avoidance.The empirical analysis concludes that social security fund inhibiting corporate tax avoidance will improve overall corporate performance,and the higher the percentage of social security fund shareholding,the greater the degree of improvement for corporate performance.In the end,this paper summarizes the overall research conclusion,and gives policy suggestions such as improving the operation and management system of social security fund,moderately relaxing restrictions on the market size of social security funds and restrictions on the decision-making of participating companies,improving the tax collection and management system,and further promoting tax and fee cuts and other policy suggestions.