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

Financial Innovation

Table 12 The effect of TRRRCs on tax payments

	(1)	(2)	(3)	(4)
Panel A: 2SLS (dependent variable: \(TAX\_PAYMENT\))
\(TRC\)	0.096*	0.097*	0.092**	0.090*
	(0.051)	(0.055)	(0.046)	(0.054)
Polynomial	Linear	Linear	Quadratic	Quadratic
Covariates	No	Yes	No	Yes
Sample size	2201	2200	4936	3951
Panel B: Sharp RDD (dependent variable: \(TAX\_PAYMENT\))
\(SME\)	0.020***	0.019***	0.017**	0.016**
	(0.005)	(0.005)	(0.007)	(0.007)
Polynomial	Linear	Linear	Quadratic	Quadratic
Covariates	No	Yes	No	Yes
Sample size	3216	3365	3985	3877

\(TRC\) 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. \(TAX\_PAYMENT\) measures tax payments. 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