Institutional environment, ownership and firm taxation

Wenfeng Wu (First Author), Oliver Meng Rui (Participant Author), Chongfeng Wu (Participant Author)

Research output: Contribution to journalJournal

23 Citations (Web of Science)


This paper examines how ownership type and institutional environment affect firm taxation. Using a sample of Chinese-listed firms from 1999 to 2006, we find that private firms enjoy a lower effective tax rate than local state-owned enterprises. In addition, the preferential taxation of private firms is associated with local government incentives to promote local economic growth. We find that private firms located in regions with a lower level of privatization receive preferential tax treatment. Our results also suggest that decentralization and interjurisdictional competition lead to financial interdependence between local governments and private firms.
Original languageEnglish
Pages (from-to)17-51
JournalEconomics of Transition
Issue number1
Publication statusPublished - 2013

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  • China
  • Ownership
  • institution
  • interjurisdictional competition
  • taxation

Indexed by

  • ABDC-A
  • SSCI


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