Tax Credit Rating And Analyst Behavior

In recent years,China has been vigorously promoting the construction of the social credit system and focusing on building a "credit China".However,there are still untrustworthy behaviors such as tax evasion and false issuance of special VAT invoices,which constraint the high-quality development of China’s economy and society.How to effectively govern tax violations and dishonesty has become one of the keynote issues of China’s policy-making departments.In July 2014,the State Administration of Taxation published the Measures for the Administration of Tax Credit,which regulated the application of tax credit evaluation indicators,methods and results.Under the background of promoting credit construction and establishing and improving a unified social credit system,tax credit rating,as a new tax collection and management method,has a comprehensive impact on China’s economy and society,and scientific evaluation of the implementation effect of tax credit rating system has become an important issue of concern to the theoretical community.Existing research has demonstrated the authoritative assurance and guarantee role of the tax credit rating system,which can reduce information asymmetry,exert "incentive effect" and "governance effect",help improve the information transparency of listed companies,constrain the opportunistic behavior of insiders,and improve the quality of financial reports.However,whether corporate honest tax practices will attract analysts’ attention and improve analysts’ earnings forecasting behavior has not yet been found and needs to be further explored.This thesisr takes all A-share listed companies from 2008 to 2020 as research samples,based on the tax credit rating results published by State Taxation Administration of The People’s Republic of China,and investigates and evaluates the influence of tax credit rating system on analysts’ tracking behavior and earnings forecasting behavior,analyzes the mechanism of tax credit rating system affecting analysts’ earnings forecasting quality,and analyzes the heterogeneous effect of tax credit rating system on analysts’ earnings forecasting behavior from the perspectives of corporate governance level,foreign analysts’ ability and regional compulsory tax collection and management.The research findings finds that:(1)Good tax credit rating results improved the number of analysts to track and the quality of earnings forecast,which is reflected in lower earnings forecast error and divergence.This conclusion still holds after controlling the related robustness tests such as reverse causality,self-selection,missing variables and dynamic effects,which shows that the tax credit rating system has improved the number of analysts tracking and the quality of earnings forecast on the whole;(2)The research results show that the tax credit rating system can reduce the error and divergence of analysts’ earnings forecast by improving the transparency of company information and earnings quality;(3)Heterogeneity test in different situations shows that the positive impact of tax credit rating on analyst’s earnings forecast quality is more significant in the samples with low corporate governance level,poor analyst’s ability and weak compulsory tax collection and management.The possible contribution and significance of this thesis consist:(1)Based on the data of tax credit rating results,this thesis starts from the analysts,this thesis deeply explores the impact of tax credit system on analysts’ tracking behavior and earnings forecasting behavior based on the data of tax credit rating results,which not only enriches the research of tax credit rating system and analyst behavior,but also enriches the research framework of "macro system and analyst behavior";(2)Examining the economic consequences of the tax credit rating system not only confirms the policy effect of the state’s promulgation of the tax credit rating system,but also provides policy reference and reference inspiration for further improving the construction of the social credit system;In the meantime,it provides reference basis for investors to fully comprehend the information of listed companies and make appropriate investment decisions.