Judicial independence and corporate tax avoidance
利用司法独立改革这一准自然实验，研究发现改革后企业避税减少，因为司法独立削弱了政治保护并增加了诉讼风险，对规模大、行贿多、财政依赖高和经济增长慢地区的企业影响更强。
In transitional countries, political manipulation of local courts is a common phenomenon, but there is little understanding of its impact on corporate behavior. We utilize a quasi-natural experiment with judicial independence reform, which removes control over personnel and finances of local courts from local governments, to examine how judicial independence influences corporate tax avoidance. We find that firms engage in less tax avoidance following the judicial independence reform. Channel tests indicate that improved judicial independence can undermine political protection and increase litigation risk, leading to lower corporate tax avoidance. Furthermore, the tax avoidance reduction effect of the reform is stronger for firms that are larger in size, engage more in bribery, and are located in cities with higher fiscal dependence and slower economic growth. Overall, this paper suggests that improvements in judicial independence curb corporate tax planning activities.