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

Financial Innovation

Table 6 Effects of TRRRCs on corporate tax avoidance: placebo tests

	Cutoff = −0.1		Cutoff = 0.15		Cutoff = −0.25		Cutoff = 0.2
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Panel A: 2SLS (dependent variable: \(BTD\))
\(TRC\)	− 0.040	− 0.002	0.251	0.097	0.394	20.5	0.017	− 0.034
	(0.082)	(0.077)	(0.680)	(0.392)	(0.710)	(66.115)	(0.283)	0.182
Polynomial	Linear	Quadratic	Linear	Quadratic	Linear	Quadratic	Linear	Quadratic
Covariates	No	Yes	Yes	No	No	Yes	Yes	No
Sample size	2653	4453	2463	4176	3727	5197	2618	4216
Panel B: Sharp RDD (dependent variable: \(BTD\))
\(SME\)	− 0.009	− 0.000	− 0.017	− 0.011	0.014	0.022**	− 0.003	0.002
	(0.009)	(0.012)	(0.012)	(0.015)	(0.009)	(0.011)	(0.012)	(0.015)
Polynomial	Linear	Quadratic	Linear	Quadratic	Linear	Quadratic	Linear	Quadratic
Covariates	No	Yes	Yes	No	No	Yes	Yes	No
Sample size	3575	3149	2535	4414	3078	4171	2673	4246

Cutoff = − 0.1, 0.15, − 0.25, 0.2 represent pseudo-cutoffs which are below or above the actual cutoff arbitrarily. \(TRC\) 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