Research On The Impact Of Executive Pay Stickiness On Corporate Tax Avoidance

As a tool to regulate income distribution,the level of corporate tax burden would directly affect the profits of enterprises,so both major shareholders and corporate managers have the motivation and demand for tax avoidance.To be honest,corporate tax avoidance has always been a hot spot in the field of taxation.Some scholars have linked executive compensation with corporate tax avoidance,and proposed that salary comparison,salary incentive methods,the effectiveness of salary contracts,and the level of remuneration will all have an impact on corporate tax avoidance.With the deepening of research,the sticky characteristics of executive compensation have been found in listed companies in China,that is,the increase in executive compensation when performance rises is greater than the decrease in executive compensation when performance declines.On the one hand,the existence of executive pay stickiness makes the relationship between enterprises and senior managers closer,thereby alleviating the principal-agent contradiction.On the other hand,there is also the possibility that executive pay stickiness is caused by excessive management power or the failure of internal control system.So does executive pay stickiness,like other characteristics of compensation,has an impact on corporate tax avoidance? This question has great practical significance.This paper takes the A-share listed companies in Shanghai and Shenzhen from 2009 to 2019 as the initial sample to study the impact of executive pay stickiness on corporate tax avoidance.In the course of the study,by combing the relevant literature such as executive compensation stickiness,corporate tax avoidance,and the relationship between executive compensation and corporate tax avoidance,the impact mechanism of executive compensation stickiness on corporate tax avoidance was explored from the aspects of enterprise risk taking and tax compliance inputs,and heterogeneity analysis was carried out from four aspects: property rights nature,enterprise life cycle,internal control quality,tax collection and management intensity.The results show that:(1)the greater the stickiness of executive compensation,the lower the degree of tax avoidance of enterprises;(2)The inhibitory effect of executive pay stickiness on corporate tax avoidance is more significant in non-state-owned enterprises,enterprises in the mature stages,enterprises with good quality of internal control,and enterprises facing greater tax collection and management intensity;(3)Executive pay stickiness affects corporate tax avoidance by reducing the risk bearing level of enterprises;and the presence of executive pay stickiness increases corporate tax compliance investment.The innovations of this paper are mainly manifested in: broadening the research fields related to executive pay stickiness and corporate tax avoidance,and when performing heterogeneity analysis,selecting the nature of property rights,the life cycle of the enterprise,internal control quality and the intensity of tax collection and administration,then the difference the impact of executive pay stickiness on corporate tax avoidance at different stages is explored according to the results of group regression.