Using the A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2003 to 2020 as the research sample,we investigate the impact of direct investment in tax havens on the cost of equity capital and its underlying mechanisms.The results show that direct investment in tax havens significantly increases enterprises'financial and tax risks,reduces information transparency,thereby raising the cost of equity capital of enterprises.Further analysis reveals that the effect of direct investment in tax havens on increasing the cost of equity capital is more pronounced for state-owned enterprises.Additionally,the impact of direct investment in tax havens on the cost of equity capital of enterprises is persistent over time.However,strong internal controls and proactive dividend payout policies can effectively mitigate the impact of direct investment in tax havens on the cost of equity capital.This paper not only enriches the research on the factors influencing the cost of equity capital and the economic consequences of direct investment in tax havens but also provides insights for the government to regulate direct investment in tax havens and for enterprises to make investment decisions.
tax havensfinancial risktax riskinformation transparencythe cost of equity capital
国家科技期刊平台
NSTL
万方数据
