Heterogeneous Institutional Investor Attention and Corporate Tax Avoidance Behavior

Abstract

This paper selects A-share listed company stocks in China between 2009 and 2021 as the research object, and from the perspective of investment portfolio, empirically investigates the impact of two types of institutional investor (pressure-resistant and pressure-sensitive) attention on corporate tax avoidance behavior. It is found that institutional investors’ willingness to participate in corporate governance is jointly influenced by their own nature and their investment portfolio. Pressure-resistant monitoring institutional investors can effectively inhibit corporate tax avoidance behavior and play a positive governance role, while pressure-sensitive monitoring institutional investors show the opposite governance effect. The influence mechanism test shows that heterogeneous monitoring institutional investors influence corporate tax avoidance behavior by changing the degree of corporate information asymmetry. Heterogeneity tests show that the impact of heterogeneous monitoring institutional investors on corporate tax avoidance behavior is more pronounced in firms with poorer legal environments and in non-state-owned firms. This paper explores the impact of heterogeneous institutional investor attention on corporate tax avoidance behavior from the perspective of portfolio, providing theoretical basis for the Securities and Futures Commission (SFC) to differentially guide institutional investors to actively participate in governance.