Digital Tax Administration and Corporate Debt Default Risk: Evidence from China’s Golden Tax Project III

Jiale Chen

doi:10.54097/tj275558

Authors

Jiale Chen

DOI:

https://doi.org/10.54097/tj275558

Keywords:

Golden Tax Project III, Digital tax administration, Corporate debt default risk, Staggered difference-in-difference

Abstract

Using China’s Golden Tax Project III as a quasi-natural experiment, this study empirically examines the impact of digital tax administration on corporate debt default risk and its mechanism based on data from Chinese A-share listed companies from 2009 to 2022. The results show that digital tax administration can reduce the risk of corporate debt default. Further, digital tax administration exerts governance effects by reducing agency costs and enhancing the information environment, thereby reducing the risk of corporate debt default. Additionally, the negative effect of digital tax administration on corporate debt default risk can be more significant in firms with a higher level of regional rule of law, poorer quality of internal control, and a higher degree of cash flow volatility. The findings of the current study provide a scientific reference for the enhancement of national governance systems in the digital era.

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