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Mandatory industry disclosure and corporate tax avoidance: Evidence from Chinese listed firms

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Listed:
  • Zhang, Limin
  • Gu, Yu
  • Yu, Ying
  • Pan, Lu

Abstract

Corporate tax avoidance undermines public finances and is widely deemed unethical, raising the question of whether greater corporate transparency can mitigate it. We investigate whether a Chinese stock exchange mandate for industry-specific disclosures can serve as an effective policy tool to curb corporate tax avoidance. Using panel data on Chinese A-share firms from 2007 to 2019 and a difference-in-differences design, we find that firms subject to the disclosure requirement experienced a significant decline in tax avoidance. We attribute this reduction to enhanced transparency and oversight, which heighten detection risk and increase the costs of aggressive tax planning. Consistent with this mechanism, the deterrent effect is most pronounced among firms with weaker external monitoring. Overall, our findings highlight regulatory disclosure as an effective governance tool, offering practical insights for policymakers seeking to strengthen corporate transparency and reduce tax avoidance.

Suggested Citation

  • Zhang, Limin & Gu, Yu & Yu, Ying & Pan, Lu, 2026. "Mandatory industry disclosure and corporate tax avoidance: Evidence from Chinese listed firms," Economic Analysis and Policy, Elsevier, vol. 89(C), pages 228-248.
    • Handle: RePEc:eee:ecanpo:v:89:y:2026:i:c:p:228-248
    DOI: 10.1016/j.eap.2025.12.008
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