The impact of tax enforcement on corporate investment efficiency: evidence from the tax administration information system |
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| Authors: | Liguang Zhang Wanyi Chen Liao Peng |
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| Institution: | 1. College of Management, Sichuan Agricultural University, Chengdu City, Sichuan Province, China;2. SILC Business School, Shanghai University, Shanghai City, China;3. School of Accountancy, Southwestern University of Finance and Economics, Chengdu City, Sichuan Province, China |
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| Abstract: | Information technology is essential in tax enforcement. This study found that stronger tax enforcement after the tax administration information system reform improved corporate investment efficiency by reducing excessive investment expenditures. The effect is more significant under higher local government fiscal pressure, poorer external information environments, weaker external corporate governance, and stronger tax avoidance motivation. The main mechanism is based on the quality of the accounting information. This study enriches the literature on the economic consequences of tax enforcement and adds investment efficiency as an influential factor, which provides implications for international governments to use information technology to strengthen tax enforcement. |
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| Keywords: | Tax reform Tax enforcement Accounting information quality |
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