Does access to credit reduce SMEs’ tax avoidance? Evidence from a regression discontinuity design

Financial Innovation

Table 10 Effects of TRRRCs on financing constrains and cash dependence

	\(SA\)		\(CASH\)
	(1)	(2)	(3)	(4)
Panel A: 2SLS (dependent variable: \(SA\) or \(CASH\))
\(TRC\)	− 0.479*	− 0.782**	− 0.426*	− 0.345*
	(0.282)	(0.400)	(0.246)	(0.200)
Polynomial	Linear	Quadratic	Linear	Quadratic
Covariates	Yes	No	Yes	No
Sample size	2394	4680	2141	4562
Panel B: Sharp RDD (dependent variable: \(SA\) or \(CASH\))
\(SME\)	− 0.052***	− 0.117***	− 0.070***	− 0.059**
	(0.012)	(0.044)	(0.023)	(0.029)
Polynomial	Linear	Quadratic	Linear	Quadratic
Covariates	Yes	No	Yes	No
Sample size	4785	5190	2978	4588

Panel A presents fuzzy RDD results based on an IV framework. Panel B represents sharp RDD results. The dependent variable \(SA\) measures Financial constraint and \(CASH\) measures cash dependence. \(TRC\) is an indicator variable that is equal to one if the firm's bank loan raise after TRRRCs. \(SME\) is an indicator variable that is equal to one if the firm's operation revenue was below the threshold of operation revenue. The discontinuity estimates are based on local linear/quadratic regressions. Standard errors are in the parentheses. *, **, and *** represent statistical significance level at the 1%, 5% and 10% levels, respectively