Technology adoption and extreme stock risk: Evidence from digital tax reform in China
Abstract The digital reform of tax administration occupies a pivotal role due in enhancing governmental governance capabilities in the digital era. We consider China’s “Golden Tax Phase III” project (GTP3P) as a representative digital reform of tax administration. Utilizing a multi-phase DID model,...
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| Format: | Article |
| Language: | English |
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Springer Nature
2025-02-01
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| Series: | Humanities & Social Sciences Communications |
| Online Access: | https://doi.org/10.1057/s41599-025-04483-x |
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| author | Kangqi Jiang Xiaofeng Chen Jiayun Li Mengling Zhou |
| author_facet | Kangqi Jiang Xiaofeng Chen Jiayun Li Mengling Zhou |
| author_sort | Kangqi Jiang |
| collection | DOAJ |
| description | Abstract The digital reform of tax administration occupies a pivotal role due in enhancing governmental governance capabilities in the digital era. We consider China’s “Golden Tax Phase III” project (GTP3P) as a representative digital reform of tax administration. Utilizing a multi-phase DID model, we analyze the impact of GTP3P on the stock market, with a particular focus on corporate stock price crash risk (SPCR). Our findings reveal a significant reduction in SPCR subsequent to the GTP3P implementation. After performing parallel trend test, dealing with endogeneity concerns, and estimating the double machine learning model, we confirm baseline findings again. Heterogeneity analysis indicates that the influences of GTP3P on SPCR is asymmetrical. In the mechanism analysis, we verified that tax administration reform significantly enhances information disclosure, which guarantees a reduction of SPCR. Finally, we perform a further analysis examining investors’ holding preferences. Contrary to expectations, we observed a decrease in stock liquidity and the shareholding of long-term and fund investors, attributed to the escalated tax burden and diminishing business benefits post-reform. This study presents an innovative perspective on the corporate implications of digitization. |
| format | Article |
| id | doaj-art-6900006d1f744a57a0b34c00516964d4 |
| institution | Kabale University |
| issn | 2662-9992 |
| language | English |
| publishDate | 2025-02-01 |
| publisher | Springer Nature |
| record_format | Article |
| series | Humanities & Social Sciences Communications |
| spelling | doaj-art-6900006d1f744a57a0b34c00516964d42025-02-09T12:25:45ZengSpringer NatureHumanities & Social Sciences Communications2662-99922025-02-0112112010.1057/s41599-025-04483-xTechnology adoption and extreme stock risk: Evidence from digital tax reform in ChinaKangqi Jiang0Xiaofeng Chen1Jiayun Li2Mengling Zhou3Business School, Shantou UniversityBusiness School, Shantou UniversityBusiness School, Shantou UniversitySchool of Credit Management, Guangdong University of FinanceAbstract The digital reform of tax administration occupies a pivotal role due in enhancing governmental governance capabilities in the digital era. We consider China’s “Golden Tax Phase III” project (GTP3P) as a representative digital reform of tax administration. Utilizing a multi-phase DID model, we analyze the impact of GTP3P on the stock market, with a particular focus on corporate stock price crash risk (SPCR). Our findings reveal a significant reduction in SPCR subsequent to the GTP3P implementation. After performing parallel trend test, dealing with endogeneity concerns, and estimating the double machine learning model, we confirm baseline findings again. Heterogeneity analysis indicates that the influences of GTP3P on SPCR is asymmetrical. In the mechanism analysis, we verified that tax administration reform significantly enhances information disclosure, which guarantees a reduction of SPCR. Finally, we perform a further analysis examining investors’ holding preferences. Contrary to expectations, we observed a decrease in stock liquidity and the shareholding of long-term and fund investors, attributed to the escalated tax burden and diminishing business benefits post-reform. This study presents an innovative perspective on the corporate implications of digitization.https://doi.org/10.1057/s41599-025-04483-x |
| spellingShingle | Kangqi Jiang Xiaofeng Chen Jiayun Li Mengling Zhou Technology adoption and extreme stock risk: Evidence from digital tax reform in China Humanities & Social Sciences Communications |
| title | Technology adoption and extreme stock risk: Evidence from digital tax reform in China |
| title_full | Technology adoption and extreme stock risk: Evidence from digital tax reform in China |
| title_fullStr | Technology adoption and extreme stock risk: Evidence from digital tax reform in China |
| title_full_unstemmed | Technology adoption and extreme stock risk: Evidence from digital tax reform in China |
| title_short | Technology adoption and extreme stock risk: Evidence from digital tax reform in China |
| title_sort | technology adoption and extreme stock risk evidence from digital tax reform in china |
| url | https://doi.org/10.1057/s41599-025-04483-x |
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