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Reasons for False Corporate Payment of Social Insurance Contribution: From the Perspective of Fiscal Decentralization

【Authors】
LU Yu, JI Yunyang & YANG Cuiying
【WorkUnit】
LU Yu (Nanjing Medical University, 211166)JI Yunyang (Guangdong University of Finance & Economics, 510320)YANG Cuiying (Shanghai University of Finance and Economics, 200433)
【Abstract】

False contribution payment is a drawback of social insurance enforcement in China, which may be affected by the fiscal decentralization system. Based on the listed companies micro-data and macro statistics data from 2008 to 2016, this paper empirically examines the impact of fiscal decentralization on false corporate payment of social insurance contribution and its mechanism. The research finds that fiscal decentralization exacerbates the degree of false corporate social insurance contribution, and when the degree of fiscal decentralization increases by 1 percentage point, the latter would increase by 0.31 percentage point. The impact mechanism test shows that the fiscal decentralization affects the degree of false social insurance contribution payment mainly through the intermediary variable of enforcement strength. The higher the degree of fiscal decentralization, the stronger incentives local governments have to loosen the enforcement intensity and the higher the level of degree of false corporate social insurance contribution is. Further research finds that the impact of fiscal decentralization on the degree of false corporate social insurance contribution is affected by the economic cycle. The effect of fiscal decentralization during economic contraction on the degree of false corporate social insurance contribution is greater than during economic expansion. This paper provides a new perspective and empirical evidence for explaining false corporate social insurance contribution, as well as policy implications for further regulating corporate social insurance evasion and bettering the social insurance system.

JEL:E62, H55, H75

【KeyWords】
False Payment of Social Insurance Contribution, Social Insurance Evasion, Fiscal Decentralization, Enforcement Strength