In order to avoid tax reasonably, enterprises often take very complicated and opaque transactions. Because of the complexity and concealment of such transactions, tax avoidance not only helps enterprises reduce the tax burden, but also increases the degree of information asymmetry, which provides opportunities and conditions for the management rent-seeking behavior. As an important external corporate governance mechanism, investors’ site visit can effectively reduce the degree of information asymmetry and restrain managerial opportunism. What is the relationship between investors’ site visit and corporate tax avoidance? This paper selects A-share listed companies in Shanghai and Shenzhen from 2013 to 2015 as samples to investigate the impact of investors’ site visit on corporate tax avoidance. It is found that investors’ site visit can restrain corporate tax avoidance. When enterprises are under great pressure of performance, the restrain effect of investors’ site visit on corporate tax avoidance is significantly weakened. Further research finds that the higher the degree of information asymmetry, the more obvious the governance effect of investors’ site visit, and the better the restraining effect on corporate tax avoidance. Moreover, investors’ site visit can improve the quality of internal control, enhance the level of investor protection, and attract more analysts’ attention. The improvement of the quality of internal control and the level of investor protection can regulate the activities of the management, and more analysts’ attention also increases the cost of corporate tax avoidance, so as to achieve the purpose of curbing corporate tax avoidance.
The separation of ownership and management makes it difficult for the owners of enterprises to obtain the real financial information timely and accurately. At present, the coverage of investors’ site visit is still not high, and investors have a little impact on corporate governance. With the gradual improvement of the interactive relationship platform for investors, the role of investors in the supervision and governance of information disclosure is gradually emerging. Further standardizing and developing the site visit platform is helpful to improve the level of corporate governance and alleviate the principal-agent problem of listed companies in China. This paper not only enriches the literature on the impact of investors’ site visit on corporate tax avoidance, but also provides empirical evidence and theoretical inspiration for actively promoting investors’ site visit. It also has certain reference value for assisting relevant departments to strengthen tax supervision and reduce tax loss. In addition, the tax avoidance activities adopted by the management when facing high pressure on performance are more covert and difficult to be discovered by investors. Investors can obtain private information through site visit and reduce the self-motivated tax avoidance activities by the management.