Journal article

The effects of macroeconomic factors on implicit taxes: Evidence from an emerging economy

Ming-Chin Chen, Chung-Yu Hung

Journal of International Accounting, Auditing and Taxation | Elsevier BV | Published : 2010


The extant research documents evidence of implicit taxes mainly in the developed countries and has not addressed the potential impact of macroeconomic factors on the realization of implicit taxes. Using a sample of Chinese listed companies, we provide empirical evidence that implicit taxes remain a salient tax cost of tax subsidies within a fast growing economy. Further, we show that economic growth reduces the positive relation between implicit taxes and tax subsidies and, conversely, capital investment growth enhances this positive relation. However, the moderating effects of the two macroeconomic factors are less salient for the Chinese state-owned enterprises than for their privately own..

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University of Melbourne Researchers