The impact of tax avoidance on enterprise investment efficiency.

Focusing on the economic consequences of tax avoidance, this paper tries to explore the impact of a company’s tax avoidance, especially the correlation between tax avoidance and overinvestment, based on the conditions of the companies listed on the Shanghai & Shenzhen Stock Exchanges (A-share companies). Our study reveals that a higher level of tax avoidance is associated with higher investment-cash flow sensitivity as well as a tendency to overinvest. This finding may be useful to enterprises when they choose their tax avoidance activities. [ABSTRACT FROM AUTHOR]