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Managers' tax administration experience and firms' direct investment in tax havens: Empirical evidence from China

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  • Pan, Xiaozhen
  • Cai, Lijuan

Abstract

In the context of economic globalization, direct investment in tax havens has emerged as a significant strategy for multinational corporations to mitigate tax liabilities. Utilizing a sample of A-share listed companies in Shanghai and Shenzhen from 2011 to 2023, this study empirically tests the impact of managers' tax administration experience on firms' direct investment in tax havens. The results show that managers' tax administration experience significantly inhibits firms' direct investment in tax havens. This inhibitory effect is predominantly observed in subsamples characterized by weak tax administration, high market competition, weak corporate governance, and high strategic aggressiveness. Mechanism testing reveals that the inhibitory effect of managers' tax administration experience on firms' direct investment in tax havens is mainly realized by reducing agency costs and strengthening reputation awareness. This study provides a policy foundation for governmental regulation of multinational tax avoidance and offers insights for firms in optimizing their management structures.

Suggested Citation

  • Pan, Xiaozhen & Cai, Lijuan, 2026. "Managers' tax administration experience and firms' direct investment in tax havens: Empirical evidence from China," Research in International Business and Finance, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:riibaf:v:87:y:2026:i:c:s0275531926001455
    DOI: 10.1016/j.ribaf.2026.103418
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