Can flexible tax enforcement enhance the stock price informativeness?Evidence based on the Tax Credit Rating
The study uses A-share listed companies in the Shanghai and Shenzhen Stock Exchanges from 2014 to 2018 to examine the impact of implementing the Tax Credit Rating on the information efficien-cy of the capital market from the perspective of stock price informativeness.The research finds that compa-nies with an A-level tax credit rating have higher stock liquidity and smaller bid-ask spreads,indicating higher stock price information efficiency.This conclusion remains valid after a series of robustness tests.Further research shows that improvements in the company's internal and external information environment-namely,better accounting earnings quality and more analyst coverage-are two important channels through which the Tax Credit Rating influences stock price informativeness.In regions with stronger tax enforce-ment,the impact of the Tax Credit Rating on stock price informativeness is even more pronounced.The findings suggest that the Tax Credit Rating,aimed at enhancing corporate tax compliance,has a significant spillover effect on the information efficiency of the capital market.
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