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Tax avoidance and state ownership : The case of Sweden

Hilling, Axel LU ; Lundtofte, Frederik LU ; Sandell, Niklas LU ; Sonnerfeldt, Amanda LU and Wilhelmsson, Anders LU (2021) In Economics Letters 208.
Abstract
We propose a simple theoretical model for how a company with both private and state shareholders decides on its optimal tax policy. The model predicts that even in the absence of state shareholding, a company will not always pick a tax policy that minimizes taxes. Conversely, majority state ownership will generally not result in zero tax avoidance. Using panel regressions on the entire population of state-owned as well as publicly listed Swedish companies from 2000–2019, we find that a one standard deviation increase in state ownership increases corporate tax payments by around 14%.
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author
; ; ; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Tax avoidance, Ownership structure, State ownership, H26, G32
in
Economics Letters
volume
208
article number
110063
publisher
Elsevier
external identifiers
  • scopus:85115816643
ISSN
0165-1765
DOI
10.1016/j.econlet.2021.110063
project
Tax reporting for a sustainable society
language
English
LU publication?
yes
id
29653465-8d8e-43e3-be40-5965847c28c7
date added to LUP
2021-09-09 16:00:34
date last changed
2022-04-27 03:47:55
@article{29653465-8d8e-43e3-be40-5965847c28c7,
  abstract     = {{We propose a simple theoretical model for how a company with both private and state shareholders decides on its optimal tax policy. The model predicts that even in the absence of state shareholding, a company will not always pick a tax policy that minimizes taxes. Conversely, majority state ownership will generally not result in zero tax avoidance. Using panel regressions on the entire population of state-owned as well as publicly listed Swedish companies from 2000–2019, we find that a one standard deviation increase in state ownership increases corporate tax payments by around 14%.}},
  author       = {{Hilling, Axel and Lundtofte, Frederik and Sandell, Niklas and Sonnerfeldt, Amanda and Wilhelmsson, Anders}},
  issn         = {{0165-1765}},
  keywords     = {{Tax avoidance; Ownership structure; State ownership; H26; G32}},
  language     = {{eng}},
  month        = {{09}},
  publisher    = {{Elsevier}},
  series       = {{Economics Letters}},
  title        = {{Tax avoidance and state ownership : The case of Sweden}},
  url          = {{http://dx.doi.org/10.1016/j.econlet.2021.110063}},
  doi          = {{10.1016/j.econlet.2021.110063}},
  volume       = {{208}},
  year         = {{2021}},
}