The minimum wage and corporate tax avoidance
利用中国城市间最低工资差异及2008年《劳动合同法》冲击，发现最低工资上升会促使企业更多避税，对劳动密集、融资受限、市场势力弱的企业影响更大。
This paper investigates the impact of the minimum wage (MW) on corporate tax avoidance. By exploiting heterogeneity in the MW level across cities and over time in China, we find that increases in the MW are associated with greater tax avoidance by firms. Our results are robust to the consideration of a sample of contiguous firms in two adjacent cities subject to different MWs, and a difference-in-differences research design that exploits the enactment of the Labor Contract Law in 2008 as an exogenous shock to the MW. In cross-sectional analyses, we find that the positive impact of MWs on tax avoidance is more pronounced for firms with higher labour intensity, greater financial constraints, and less product market power and in regions with laxer enforcement. Our paper suggests that the MW policy imposes substantial, albeit likely unintended, externalities on corporate tax. Our findings can help inform policymakers of more potential implications of MW policies.