Research On The Impact Of Peer Debt Default Risk On Corporate Tax Avoidance

In recent years,due to the slowdown of macroeconomic growth,financial deleveraging and supply side structural reform,the financial environment has tightened and corporate cash flow has deteriorated,resulting in a large number of bond defaults.In the transitional period of China’s economy from a stage of rapid growth to a stage of high-quality development,due to the macroeconomic downturn,the decline in profitability and the increasingly severe financing environment,the debt default problem caused by the inability of listed companies to pay their debts has become increasingly prominent.At the same time,due to the impact of the epidemic and other macro environments,China’s economy is still under great downward pressure.In the foreseeable future,corporate debt default events will still be the "black swan" of the capital market,and debt default will have serious negative economic consequences for the real economy and micro enterprises.At the same time,social psychology research has found that there is a widespread "peer effect" in financial,economic and other social fields.Enterprises are not independent individuals,but exist in the market.Any decisions they make may affect the decision-making behavior of other enterprises in the market,and their own decisions will also be affected by other relevant enterprise behaviors,that is,individual behavior decisions are vulnerable to the impact of similar group related activities.Based on the current situation of the concentration of enterprises’ debt default industries in China,under this background,it is of great significance to explore the economic consequences of peer debt default risks for the steady operation of the capital market and the promotion of high-quality economic development.Debt financing connects enterprises and creditors in a contractual way.Enterprises need sufficient cash flow to repay the principal and interest of debt on schedule.Tax avoidance,as a substitute for traditional financing,has an inherent relationship with corporate debt.Therefore,from the perspective of corporate tax avoidance,this paper explores whether there is a spillover effect on the default risk of peer debt,and analyzes the path between the two.This is of great practical significance for preventing systematic financial risks and promoting financial stability,as well as for establishing a risk early warning mechanism for micro enterprises and mitigating the negative impact of industrial risks on enterprises.Firstly,based on the contagion theory of debt default risk,effective tax planning theory,signal transmission theory,and principal-agent theory,this article proposes the hypothesis that peer debt default risk suppresses corporate tax avoidance.Secondly,this article takes Ashare listed companies on the Shanghai and Shenzhen stock markets from 2010 to 2021 as the empirical research object to empirically test the relationship between peer debt default risk and corporate tax avoidance.Once again,this article empirically tests the mediating mechanism of the relationship between managers’ risk preferences,earnings management tendencies,and media attention.Finally,this article empirically tests whether there is heterogeneity in analyst attention and financing constraints between the two,and explores the economic consequences of peer debt default risk and corporate tax avoidance from the perspective of innovative investment.The main research conclusions of this article are as follows:(1)The higher the risk of peer debt default,the lower the degree of tax avoidance of the target enterprise.(2)Peer debt default risk can effectively curb corporate tax avoidance behavior by reducing managers’ risk preferences,increasing upward earnings management,and increasing media attention.In order to ensure the reliability of the research conclusions,this paper adopts variable replacement measurement method,controls the overall profitability of the industry,adopts fixed effect model and instrumental variable method to conduct robustness test.(3)Further analysis results indicate that peer debt default risk suppresses corporate tax avoidance with significant heterogeneity in analyst attention and financing constraints.The innovations of this paper are as follows: First,from the perspective of peer debt default risk spillover,exploring the economic consequences of default risk at the industry level will help enrich the relevant research on debt default risk.Second,integrate the industry risk and micro enterprise behavior at the medium level into the framework,and expand the research scope of tax avoidance influencing factors from the perspective of enterprise tax avoidance.Third,this paper systematically studies the intermediary transmission mechanism of peer debt default risk affecting corporate tax avoidance,which is helpful to clarify how other corporate debt default risk affects the target corporate financing policy,and has important practical significance.