The Effect of Foreign Institutional Ownership on Corporate Tax Avoidance: International Evidence

Taxes are the largest state revenue, but tax companies are a burden that can reduce profits received by shareholders. Then in 2019 tax revenue from the mining sector in 2019 experienced a significant decline. Based on this, this study aims to see how the level of profitability of companies, institutional ownership and audit committees affect mining companies in avoiding taxes. By using 19 company samples for the 2016-2018 period, researchers found that profitability and audit committees could increase corporate tax avoidance. whereas institutional ownership has no influence on tax avoidance.

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The impact of ownership structure on corporate tax avoidance with corporate social responsibility as mediating variable

Journal of Financial Crime ◽

10.1108/jfc-07-2021-0152 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Anissa Dakhli

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Tax Avoidance ◽

Institutional Ownership ◽

Corporate Tax ◽

Data Set ◽

Content Type ◽

Corporate Social ◽

The Impact ◽

Practical Implications

Purpose The purpose of this paper is to investigate the direct and indirect relationship between institutional ownership and corporate tax avoidance using corporate social responsibility (CSR) as a mediating variable. Design/methodology/approach This study uses panel data set of 200 French firms listed during the 2007–2018 period. The direct and indirect effects between managerial ownership and tax avoidance were tested by using structural equation model analysis. Findings The results indicate that institutional ownership negatively affects tax avoidance. The greater the proportion of the institutional ownership, the lower the likelihood of tax avoidance usage. From the result of the Sobel test, this study indicated that CSR partially mediates the effect of institutional ownership on corporate tax avoidance. Practical implications The findings have some policy and practical implications that may help regulators in improving the quality of transactions and in achieving more efficient market supervision. They recommend to the government to add regulations and restrictions to the structure of corporate ownership to control corporate tax avoidance in French companies. Originality/value This study extends the existing literature by examining both the direct and indirect effect of institutional ownership on corporate tax avoidance in French companies by including CSR as a mediating variable.

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Institutional Ownership and Corporate Tax Avoidance: New Evidence

The Accounting Review ◽

10.2308/accr-51529 ◽

2016 ◽

Vol 92 (2) ◽

pp. 101-122 ◽

Cited By ~ 63

Author(s):

Mozaffar Khan ◽

Suraj Srinivasan ◽

Liang Tan

Keyword(s):

Tax Avoidance ◽

Institutional Ownership ◽

Regression Discontinuity Design ◽

Corporate Tax ◽

Profit Margins ◽

Exogenous Shocks ◽

Analyst Expectations ◽

Tax Shelters ◽

New Evidence ◽

Shed Light

ABSTRACT We provide new evidence on the agency theory of corporate tax avoidance (Slemrod 2004; Crocker and Slemrod 2005; Chen and Chu 2005) by showing that increases in institutional ownership are associated with increases in tax avoidance. Using the Russell index reconstitution setting to isolate exogenous shocks to institutional ownership, and a regression discontinuity design that facilitates sharper identification of treatment effects, we find a significant and discontinuous increase in tax avoidance following Russell 2000 inclusion. The tax avoidance involves the use of tax shelters, and immediate benefits include higher profit margins and likelihood of meeting or beating analyst expectations. Collectively, the results shed light on the effect of increased ownership concentration on tax avoidance.

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Corporate tax avoidance and cost of equity capital: international evidence

Applied Economics ◽

10.1080/00036846.2019.1706716 ◽

2019 ◽

Vol 52 (29) ◽

pp. 3123-3137

Author(s):

Hong Min Chun ◽

Grace Il-Joo Kang ◽

Sang Ho Lee ◽

Yong Keun Yoo

Keyword(s):

Tax Avoidance ◽

Equity Capital ◽

Cost Of Equity Capital ◽

Cost Of Equity ◽

Corporate Tax ◽

International Evidence

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INSTITUTIONAL OWNERSHIP AND TAX AVOIDANCE: COMPARATIVE STUDY IN BUMN (BADAN USAHA MILIK NEGARA) AND PRIVATE COMPANIES

Jurnal Riset Akuntansi Dan Bisnis Airlangga ◽

10.20473/jraba.v6i2.130 ◽

2021 ◽

Vol 6 (2) ◽

Author(s):

Ellyzabeth Putri Vizandra ◽

Elia Mustikasari

Keyword(s):

Sampling Method ◽

Stock Exchange ◽

Tax Avoidance ◽

Sampling Technique ◽

Institutional Ownership ◽

Linear Analysis ◽

Corporate Tax ◽

Private Companies ◽

Significant Difference ◽

The Government

This study aims to provide empirical evidence regarding the effect of institutional ownership on tax avoidance and differences in tax avoidance in state-owned and private companies. This study uses a quantitative approach with explanatory and comparative methods. The sample of this research is state-owned and private companies listed on the Indonesia Stock Exchange from 2014 to 2018 with a total of 60 companies. The sampling technique in this study uses a purposive sampling method. Hypothesis testing in this study uses Multiple Regression Linear Analysis to examine the effect of institutional ownership on tax avoidance and uses the Independent Sample T-Test to examine differences in tax avoidance in BUMN and private. The results of this study indicate that institutional ownership has no effect on the practice of corporate tax avoidance. This study also finds that there is no significant difference in tax avoidance practices in state-owned and private companies. The results of this study are expected to be suggestions for shareholders, especially institutional ownership to improve their monitoring function to the management to minimize tax avoidance. In addition, the government is expected to provide supervision with the same proportions, both to BUMN and private companies.

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