| Issue |
E3S Web Conf.
Volume 409, 2023
International Conference on Management Science and Engineering Management (ICMSEM 2023)
|
|
|---|---|---|
| Article Number | 06012 | |
| Number of page(s) | 11 | |
| Section | Risk Assessment | |
| DOI | https://doi.org/10.1051/e3sconf/202340906012 | |
| Published online | 01 August 2023 | |
Does the Tax Cuts Policy Lower Firm Survival Risk? Evidence from China
1 School of Business, Sichuan University, Chengdu, 610064, People’s Republic of China
2 The Chinese University of HongKong, Shatin, HongKong, 999077, People’s Republic of China
3 GSAS of Columbia University, New York, 10027, United States
* e-mail: 2042600317@qq.com
This paper examines the effect of tax cuts policy on firm survival risk. We analyze a panel data of China’s listed companies over the period 20082021 based on two different techniques: Kaplan-Meier survival estimator and the Cox proportional hazards model. Our findings reveal that the tax cuts policy has positive and significant effect on improving firms’ survival probabilities. Moreover, compared with the income tax cuts, the value-added tax cuts play a more effective role on improving firms’ survival probability. By dividing firm locations into different regions, we also find that the tax cuts policy exerts a positive influence on firms’ survival probabilities in eastern region, while the positive effect in the central and western regions is relatively weaker. From the perspective of profitability heterogeneity, the results show that the beneficial effect from tax cuts policy on firm survival is more pronounced for firms with weaker profitability.
Key words: Taxation / Failure rate / Cox proportional hazards model
© The Authors, published by EDP Sciences, 2023
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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