Tax avoidance, tax risk and the cost of debt in a bank-dominated economy

2018 ◽  
Vol 33 (8/9) ◽  
pp. 683-699 ◽  
Author(s):  
Jost Hendrik Kovermann
Keyword(s):  
Interest Rates ◽  
Design Methodology ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Research Literature ◽  
Cost Of Debt ◽  
Content Type ◽  
Negative Effect ◽  
The Cost ◽  
The Relationship

Purpose The purpose of this paper is to investigate whether tax avoidance has a positive or negative effect on firms’ cost of debt. It further investigates whether the implications for the cost of debt are different for tax avoidance and tax risk. Design/methodology/approach Based on a sample of 201 firms listed on Frankfurt Stock Exchange from 2009 to 2014, three tests are performed using pooled OLS regression. Controlling for numerous variables that have been found to influence the cost of debt, a first model examines the relationship between tax avoidance and the cost of debt. A second model examines the relationship between tax risk and the cost of debt and a third model interacts tax avoidance with tax risk. Findings The results show that tax avoidance has a negative effect on the cost of debt; however, tax risk increases the cost of debt. These results indicate that creditors generally view tax avoidance as positive and that tax avoidance is not regarded as inherently risky. Although tax avoidance is rewarded by capital markets with lower interest rates, tax risk contributes to higher interest rates. The effect of tax avoidance on the cost of debt depends therefore on the level of tax risk. Originality/value This paper contributes to two distinct strands of research: literature investigating the driving factors behind the cost of debt and literature investigating the consequences of firms’ tax avoidance activities.

scholarly journals PENGARUH PENGHINDARAN PAJAK TERHADAP BIAYA HUTANG DAN KEPEMILIKAN INSTITUSIONAL SEBAGAI PEMODERASI

2019 ◽  
Vol 21 (1) ◽  
pp. 47-60
Author(s):  
FAHREZA UTAMA ◽  
DWI JAYA KIRANA ◽  
KORNEL SITANGGANG
Keyword(s):  
Sampling Method ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Institutional Ownership ◽  
Cost Of Debt ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Section Data ◽  
The Cost ◽  
The Relationship

The aim of this study is to test the influence of tax avoidance towards the cost of debt moderated by institutional ownership. In this research, tax avoidance measured by proxy of Book Tax Different (BTD) and Cash Effective Tax Rate (CETR). The population in this research is manufacturing firms that listed on Indonesia Stock Exchange (IDX) with 2015-2017 time periods. The amount of sample before outlier is 198 datas collected with purposive sampling method, then the amount of sample after outlier is 187 datas for first model and 186 datas for second model. Cross section data is used in this research. Multiple linear regression, determination coefficients, and partial test (t-test) is used with some help of programming data using SPSS (Statistical Product and Service Solution) 23th version to analize in this research. The result of this study indicate tax avoidance has not significant influence towards the cost of debt, and institutional ownership can’t moderate the relationship between tax avoidance and the cost of debt.

scholarly journals PENGARUH PENGHINDARAN PAJAK, KEPEMILIKAN INSTITUSIONAL, DAN PROFITABILITAS TERHADAP BIAYA HUTANG (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di BEI Periode 2011-2015)

2019 ◽  
Vol 7 (1) ◽  
pp. 58-69
Author(s):  
Elvis Nopriyanti Sherly ◽  
Desi Fitria
Keyword(s):  
Stock Exchange ◽  
Tax Avoidance ◽  
Institutional Ownership ◽  
Cost Of Debt ◽  
Effective Tax Rate ◽  
Return On Assets ◽  
Tax Rate ◽  
Negative Effect ◽  
Internal Funds ◽  
The Cost

The purpose of this study is to prove the effect of tax avoidance, institutional ownership, and profitability on cost of debt. The sample consisted of 71 manufactured firms in listed in Indonesian Stock Exchange from 2011-2015 by using a purposive sampling method. The results of the study showed that the tax avoidance had negative effect on cost of debt. The meaning is getting smaller Cash Effective Tax Rate the cost of debt incurred greater. The results of this study also showed that the institutional ownership doesn’t had effect on cost of debt. Furthermore, the result of Return on Assets (ROA) as proxy profitability had a negative effect on cost of debt. The meaning that the higher the profitability of the company then the company will have a high internal funds that can be used in making the use of debt financing is getting smaller which causes the cost of debt also becomes smaller.

Are corporate social responsibility disclosures relevant for lenders? Empirical evidence from France

2019 ◽  
Vol 58 (2) ◽  
pp. 267-279 ◽  
Author(s):  
Amal Hamrouni ◽  
Ali Uyar ◽  
Rim Boussaada
Keyword(s):  
Interest Rates ◽  
Three Dimensions ◽  
Cost Of Debt ◽  
Environmental Disclosure ◽  
Debt Contracts ◽  
Content Type ◽  
Negative Effect ◽  
Csr Disclosure ◽  
Corporate Social ◽  
The Cost

Purpose The purpose of this paper is to test whether or not CSR disclosure (i.e. aggregate as well as its three sub-indicators) reduces the cost of debt for French corporations listed in the SBF 120 index between 2010 and 2015. Design/methodology/approach CSR disclosure ratings of firms were collected from the Bloomberg database under three dimensions such as environmental, social and governance (ESG). Then, a pooled regression analysis was run. Findings The results indicate that overall CSR disclosure score as a combination of ESG disclosure scores has a negative effect on the cost of debt (i.e. lowers the cost of debt). While environmental disclosure is negatively associated with the cost of debt, social disclosure is unexpectedly positively associated, and governance disclosure has an insignificant association with the cost of debt. Research limitations/implications The study has two main limitations. First, the analysis does not consider contractual constraints and obligations that might exist in debt contracts (Jung et al., 2018). Second, the analyses cover a specific time period (i.e. between 2010 and 2015) for a specific country (i.e. France) excluding utilities and the financial sector. Practical implications Overall, it is inferred from the results that financial markets for lenders take into account CSR disclosure when assessing the creditworthiness of borrowers. Specifically, environmental disclosure is the only subdimension of CSR that is influential on creditors’ decisions to offer favorable interest rates. In line with this outcome, companies can assess their processes and be more aligned with eco-friendly practices, and investors are particularly advised to invest in those types of firms. Originality/value This study extends scant literature on the association between CSR and the cost of debt by exploring how creditors treat CSR dimensions dissimilarly in granting loans to firms. The findings of this study have particular importance as financial debt is one of the most predominant forms of external financing.

scholarly journals GOOD CORPORATE GOVERNANCE AND TAX AVOIDANCE TO COST OF DEBT WITH GROWTH OPPORTUNITYAS MODERATING (Empirical Study on Manufacturing Company and Finance Service Listed in IDX 2015-2019)

2020 ◽  
Vol 5 (2) ◽  
pp. 123
Author(s):  
Sugiyanto Sugiyanto ◽  
Fitri Dwi Febrianti ◽  
Suripto Suripto
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Tax Avoidance ◽  
Cost Of Debt ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
Good Corporate Governance ◽  
The Cost ◽  
The Relationship

Principles of good corporate governance can strengthen the relationship between the effect of Tax Avoidance, the Board of Commissioners and Managerial Ownership of the Cost of Debt on manufacturing companies listed on the Indonesia Stock Exchange (IDX). The hypothesis in the study uses the Eviews tool, tested 3 models 1) approach before using partial moderating (2) approach before using simultaneous moderating (3) The moderating growth opportunity.Samples consist of purposive sampling model with multiple linear regression analysis methods. The data used is the company's financial statements for 2015-2019. Research was taken from 28 selected manufacturing companies listed on the Indonesia Stock Exchange (IDX) and found samples 140 financialstatements.The results of observation were obtained partially by Tax Avoidance has a significant effect on the Cost of Debt, the Board of Commissioners has not a significant effect on the Cost of Debt, and Managerial Ownership has a significant effect on Cost of Debt. While simultaneously Tax Avoidance, Board of Commissioners, and Managerial Ownership influence the Cost of Debt. The moderating of growth opportunity strengthens the relationship between Good Corporate Governance and positive coefficient on the cost of debt, strengthened by the Leverage and Size control variables

The relationship between cost stickiness and financial reporting quality in Tehran Stock Exchange

2018 ◽  
Vol 67 (9) ◽  
pp. 1550-1565 ◽  
Author(s):  
Mahdi Salehi ◽  
Nasrin Ziba ◽  
Ali Daemi Gah
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Statistical Software ◽  
Testing Hypotheses ◽  
Content Type ◽  
The Relationship ◽  
Cost Stickiness

Purpose The purpose of this paper is to investigate the relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange. Design/methodology/approach Data of all Iranian manufacturing listed companies gathered for testing hypotheses during 2010–2016 and R statistical software are employed in order to analyzing data. Findings The results of this study indicate that there is a significant relationship between administrative, sale, material, labor and overhead costs and the financial reporting qualities of the companies under study. Originality/value The study focuses on relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange, which is the first study of its type in Iran.

Relationship between corporate governance and audit switching: Iranian evidence

2017 ◽  
Vol 59 (5) ◽  
pp. 673-686
Author(s):  
Mahdi Salehi ◽  
Ali Asgar Alinya
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Stock Exchange ◽  
Listed Companies ◽  
Panel Analysis ◽  
Cross Sectional ◽  
Content Type ◽  
Effective Factors ◽  
Dependent Variables ◽  
The Relationship

Purpose This paper aims to investigate the relationship between corporate governance and auditors switching of listed companies on the Tehran Stock Exchange. Design/methodology/approach To achieve the objectives of this study, 12 hypotheses developed which and tests the relationship between corporate governance and selecting and switching auditors in Iran during 2008-20014 by selecting 116 listed companies on the Tehran Stock Exchange. To test the hypotheses, the cross-sectional time-series nature of research variables data, panel analysis is used. Also, to investigate the relationship between independent and dependent variables in each year, the logistic regression is used. Findings The results of the study indicate that there is a weak relationship between corporate governance auditors switching. Therefore, it could be concluded that there are some other effective factors on which selecting and switching auditors in studied companies are more dependent. Originality/value The current study is almost the first study which has been conducted in Iran, so the results of the study may be beneficial to the Iranian conditions as well as other developing countries.

scholarly journals Work, resilience and sustainable futures

2020 ◽  
Vol 12 (1) ◽  
pp. 22-41 ◽  
Author(s):  
Lee Fergusson ◽  
Luke van der Laan ◽  
Bradley Shallies ◽  
Matthew Baird
Keyword(s):  
Higher Education ◽  
Related Problem ◽  
Design Methodology ◽  
Research Literature ◽  
Content Type ◽  
Work Related ◽  
Research Problems ◽  
Sustainable Futures ◽  
The Relationship ◽  
Practical Implications

PurposeThis paper examines the relationship between work, resilience and sustainable futures for organisations and communities by considering the nature of work-related problems (WRPs) and the work-based research designed to investigate them. The authors explore the axis of work environment > work-related problem > resilience > sustainable futures as it might be impacted by work-based research.Design/methodology/approachThe paper introduces two current real-world examples, one in Australia and one in Asia, of work-based research projects associated with higher education aimed at promoting resilience and sustainability, and discusses the research problems, questions, designs, methods, resilience markers and sustainability markers used by these projects.FindingsWork-based research, when conducted rigorously using mixed methods, may contribute to increased resilience of organisations and communities and thereby seeks to promote more sustainable organisational and social futures.Practical implicationsWork-based research conducted in higher education seeks to investigate, address and solve WRP, even when such problems occur in unstable, changing, complex and messy environments.Social implicationsResilience and sustainable futures are ambiguous and disputed terms, but if work-based research can be brought to bear on them, organisations and communities might better adapt and recover from challenging situations, thus reducing their susceptibility to shock and adversity.Originality/valueWhile resilience and sustainability are commonly referred to in the research literature, their association to work, and specifically problems associated with work, have yet to be examined. This paper goes some of the way to addressing this need.

Teacher’s turnover intentions

2017 ◽  
Vol 31 (6) ◽  
pp. 828-842 ◽  
Author(s):  
Rabia Imran ◽  
Kamaal Allil ◽  
Ali Bassam Mahmoud
Keyword(s):  
Public Schools ◽  
Design Methodology ◽  
Affective Commitment ◽  
Turnover Intentions ◽  
Three Dimensions ◽  
Sultanate Of Oman ◽  
Continuance Commitment ◽  
Content Type ◽  
Negative Effect ◽  
The Relationship

Purpose The purpose of this paper is to explore the path of motivation leading to organizational commitment resulting in reduced turnover intentions (TIs). It examine the relationship between dimensions of motivation (amotivation, introjected regulations (IRs) and intrinsic motivation (IM)) with dimensions of commitment (affective, normative and continuance). Furthermore, it test the effect of these three dimensions of commitment on TIs. Design/methodology/approach A sample of 467 teachers working in public schools in Dhofar Governate in Sultanate of Oman was selected for the study. A path analysis was conducted to test the hypothesized model. Findings The analysis unveils that teacher’s TIs can be reduced with a right mix of motivation and commitment. Furthermore, amotivation is only linked to affective commitment and this linkage is positive; IRs positively affect continuance and normative commitment (NC); and IM positively affects affective commitment and NC. Moreover, a significant negative effect of affective, normative and continuance commitment is found on TIs. Originality/value This research sheds light on how motivation can indirectly affect TI through commitment. This study is of immense importance as it focuses on the education sector in Oman especially in Dhofar Governate.

scholarly journals The effect of auditor characteristics on tax avoidance of Iranian companies

2020 ◽  
Vol 27 (2) ◽  
pp. 119-134 ◽  
Author(s):  
Mahdi Salehi ◽  
Hossein Tarighi ◽  
Tahereh Alidoust Shahri
Keyword(s):  
Stock Exchange ◽  
Emerging Market ◽  
Tax Avoidance ◽  
Audit Fees ◽  
Industry Specialization ◽  
Content Type ◽  
Auditor Industry Specialization ◽  
Auditor Tenure ◽  
The Relationship ◽  
Auditor Characteristics

Purpose The purpose of this paper is to investigate the relationship between auditor characteristics and the level of tax avoidance in an emerging market. Design/methodology/approach In this regard, the effect of various factors such as auditor tenure, auditor industry specialization, audit reports and audit fees on tax avoidance was examined. The study sample includes listed companies in the Tehran Stock Exchange. The time period of study is six years from 2011 to 2016. Also in this study, firm size, leverage, firm age and auditor size were controlled. Findings The results of this research were determined in four hypotheses. First and second hypotheses that explore the relationship between auditor tenure and auditor industry specialization with tax avoidance were not confirmed. But the results showed a significant relationship between the type of audit opinions and audit fees with tax avoidance. Originality/value The current study investigates the auditor characteristics on tax avoidance in a developing nation of Iran and the results may helpful the developing countries.

Dividend payment and earnings quality: evidence from Indonesia

2014 ◽  
Vol 22 (2) ◽  
pp. 103-117 ◽  
Author(s):  
Febriela Sirait ◽  
Sylvia Veronica Siregar
Keyword(s):  
Emerging Markets ◽  
Design Methodology ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Positive Association ◽  
Significant Positive Association ◽  
Dividend Payment ◽  
Content Type ◽  
The Relationship

Purpose – This research aims to examine the relationship between dividend payment and earnings quality. Design/methodology/approach – The authors examine four dividend features: dividend-paying status, dividend size, dividend changes, and dividend persistence. The samples consist of 90 firms from the manufacturing industry in the years 2005-2009. Multiple regression is used for testing hypotheses. Findings – The results show that dividend-paying status, dividend increase, and persistence in dividend payment have significant positive association with earnings quality. However, the authors do not find evidence that larger dividend size is an indicator of higher earnings quality. Overall, the results show that dividend-paying status, increase in dividend size, and persistence in dividend payment are indicators or signals of higher earnings quality. Research limitations/implications – This study examines only the manufacturing firms listed on the Indonesia Stock Exchange. Further study based on different industries and/or different emerging markets is needed before generalizing results. Originality/value – Few studies have examined dividend payment in emerging markets. This study fills the void.

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