Returnee Directors and Corporate Tax Avoidance

2021 ◽  
pp. 0148558X2110173
Author(s):  
Jia Chen ◽  
Dongjie Chen ◽  
Li Liu ◽  
Zhong Wang
Keyword(s):  
Instrumental Variable ◽  
Tax Avoidance ◽  
Independent Directors ◽  
Positive Relation ◽  
Corporate Tax ◽  
Listed Firms ◽  
Board Directors ◽  
Low Levels ◽  
Using Data ◽  
Work Abroad

This study evaluates the effect of returnee directors on corporate tax avoidance by using data on publicly listed Chinese companies from 2000 to 2012. Returnee directors grow up in China and then study or work abroad before returning home to be listed firms’ board directors. We use the introduction of provincial policies toward attracting skilled individuals with foreign experience as an instrumental variable for Returnee directors, which is the fraction of returnee directors divided by the total number of directors within a firm. Using quantile regression, we find a positive relation between Returnee directors and corporate tax avoidance for low levels of tax avoidance but a negative relation for high levels of tax avoidance. The result is robust to a battery of tests. The relation between returnee directors and tax avoidance is stronger for state-owned enterprises (SOEs) than non-SOEs and stronger for returnees who hold MBA degrees, possess a background in accounting or auditing, or are independent directors than other returnees.

scholarly journals Do Corporate Environmental Sustainability Practices Influence Firm Value? The Role of Independent Directors: Evidence from Saudi Arabia

2020 ◽  
Vol 12 (22) ◽  
pp. 9768
Author(s):  
Mohammed Abdullah Ammer ◽  
Meqbel Mishary Aliedan ◽  
Mansour Abdullah Alyahya
Keyword(s):  
Environmental Sustainability ◽  
Firm Value ◽  
Independent Directors ◽  
Environmental Reporting ◽  
Environmental Practices ◽  
Listed Firms ◽  
Board Directors ◽  
Sustainability Practices ◽  
Using Data ◽  
Corporate Environmental Sustainability

Environmental sustainability has become a significant approach for firms to enhance their competitive advantage and reputation. This study examines the association between environmental sustainability disclosures and firm value, in addition to the moderating impact of independent board directors on this association. Using data from Saudi listed firms, we find that reporting environmental sustainability practices has a positive and significant impact on firm value, suggesting that enhanced responsibility and transparency in addition to improved stakeholder trust are important in promoting firm value. We also find that the influence of the reported environmental sustainability practices on firm value is strongly and positively moderated by the presence of independent directors on firms’ boards, signifying that stakeholders relate environmental reporting by firms to more independent directors providing better accountability to environmental practices. The implications of this study will be of great importance for policymakers, firm management, academia, and investors in considering the adoption and importance of firms’ environmental practices.

Corporate dispersion and tax avoidance

2019 ◽  
Vol 13 (3) ◽  
pp. 706-732 ◽  
Author(s):  
Kun Su ◽  
Bin Li ◽  
Chen Ma
Keyword(s):  
Internal Control ◽  
Chief Executive Officers ◽  
Tax Avoidance ◽  
Chief Executive ◽  
Corporate Tax ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Governance Mechanisms ◽  
Executive Officers ◽  
The Impact

Purpose The purpose of this paper is to investigate the effects of corporate dispersion on tax avoidance from geographical and institutional dispersion perspectives by using evidence from China. Design/methodology/approach Using a panel data of Chinese listed firms during 2003-2015, this paper estimates with correlation analysis and multiple regression analysis. Findings Both geographical and institutional dispersion are negatively associated with the degree of corporate tax avoidance. Furthermore, corporate governance mechanisms and female chief executive officers can mitigate the negative relation between corporate dispersion and tax avoidance. The results also indicate that ineffective internal control is one of the channels through which corporate dispersion reduces tax avoidance. Originality/value This is the first paper about the impact of firm dispersion on the degree of tax avoidance, complementing the research content of diversification and corporate decision-making.

scholarly journals DO FIRMS FACING INCREASES IN FINANCIAL CONSTRAINTS TEND TO GENERATE CASH THROUGH TAX AVOIDANCE? EMPIRICAL EVIDENCE FROM INDONESIA PUBLICLY LISTED FIRMS

Scientax ◽  
2021 ◽  
Vol 2 (2) ◽  
pp. 232-247
Author(s):  
John Erhan Prasetyo Hermawan ◽  
Riko Riandoko
Keyword(s):  
Firm Value ◽  
Financial Constraints ◽  
Global Financial Crisis ◽  
Tax Avoidance ◽  
Corporate Image ◽  
Avoidance Behaviour ◽  
Regression Result ◽  
Corporate Tax ◽  
Listed Firms ◽  
The Impact

This study examines the effect of increases in financial constraints measured at both firm-specific and macroeconomic level on corporate tax avoidance behaviour. Based on a hand-collected sample of 60 publicly listed firms on Indonesia Stock Exchange (IDX) from the year 2009 to 2016, our regression result shows that firms facing increased firm-specific constraints exhibit lower cash effective tax rates ranging from 0.55 to 9.57 percent which equate to between 0.60 and 10.29 percent of operating cash flows, whereas at macroeconomic constraints do not. The firm-specific constraints result is consistent with our hypothesis and Edwards, et al. (2016), whereas macroeconomic constraints result is inconsistent. Nevertheless, its inconsistency can be caused by several factors, i.e.: (1) the change of corporate tax rate from 28 to 25 percent as fiscal policy after the impact of Global Financial Crisis 2008. It could reduce tax avoidance behaviour; (2) Indonesian Go Public Information Centre stated that the purpose of the firms’ Initial Public Offering (IPO) is not only to finance the firms’ operation due to increases in financial constraints, but also to increase firm value, improve corporate image, grow employee loyalty, maintain business continuity and get tax incentives; (3) the equity financing in Indonesia is more related to equity participation activities conducted among shareholders that’s not listed on the stock or bond markets, e.g. private placement, joint venture, mergers and acquisitions.

scholarly journals Board Directors’ Expertise and Corporate Corruption Disclosure: The Moderating Role of Political Connections

2019 ◽  
Vol 11 (16) ◽  
pp. 4491 ◽  
Author(s):  
Masud ◽  
Bae ◽  
Manzanares ◽  
Kim
Keyword(s):  
Resource Dependence ◽  
Moderating Effect ◽  
Political Connections ◽  
Corporate Management ◽  
Positive Role ◽  
Listed Firms ◽  
Board Directors ◽  
Using Data ◽  
The Relationship

Professional expert directors extensively influence corporate corruption disclosure (CCD), while higher political connections may exacerbate corporate management. This study investigates the relationship between the presence of external experts on a board and CCD, as well as the moderating effect of political connections, on the positive role of legal experts in CCD. The study combines agency, resource dependence and stakeholder theories to show how resourceful directors on the board can promote corruption disclosure. Using data on listed firms in the Bangladeshi financial sector, the study analyzes 247 firm-year observations from 2012 to 2016. The results of a multiple regression analysis indicate that accounting experts, legal experts, political connections and corporate media visibility each have a positive and significant influence on CCD. Moreover, the moderating effect of political connections on the relationship between legal experts and CCD is negative and significant due to their higher political influences. The study has significant implications for corporate governance and for policies concerning the development of the economy while reducing corruption.

scholarly journals The Non-Linear Relationship Between CEO Compensation Incentives And Corporate Tax Avoidance

2017 ◽  
Vol 33 (3) ◽  
pp. 439-450 ◽  
Author(s):  
Seungmin Chee ◽  
Wooseok Choi ◽  
Jae Eun Shin
Keyword(s):  
Executive Compensation ◽  
Linear Relationship ◽  
Ceo Compensation ◽  
Tax Avoidance ◽  
Corporate Tax ◽  
Non Linear ◽  
Prior Literature ◽  
Low Levels ◽  
Risk Reducing ◽  
Compensation Incentives

This study examines the effect of CEO compensation incentives on corporate tax avoidance. Unlike prior literature that assumes a monotonic relation between executive compensation incentives and tax avoidance, we find a non-linear relation between the two. Specifically, we find that CEO compensation incentives exhibit a positive relation with corporate tax avoidance at low levels of compensation incentives, whereas they show a negative relation at high levels of compensation incentives. We further find that the non-linear relationship between CEO compensation incentives and corporate tax avoidance does not exist for the subsample of S&P500 firms. Collectively, we provide evidence of the two counter effective forces, namely, - the incentive alignment effect and the risk-reducing effect, - that help explain the effect of CEO compensation incentives on tax avoidance.

Corporate Tax Avoidance Practices: An Empirical Evidence from Nigerian Firms

2019 ◽  
Vol 64 (3) ◽  
pp. 39-53
Author(s):  
Tajudeen Adejare Adegbite ◽  
Mustapha Bojuwon
Keyword(s):  
Intangible Assets ◽  
Stock Exchange ◽  
Transfer Pricing ◽  
Panel Data Analysis ◽  
Tax Avoidance ◽  
Secondary Data ◽  
Corporate Tax ◽  
Listed Firms ◽  
Analysis Technique ◽  
Primary Driver

Abstract This study examined the existence of corporate tax avoidance practices among the public listed firms in Nigeria. Secondary data were obtained from annual published reports from selected Nigerian firms listed in Nigeria stock exchange from 2006 to 2017. Panel Data analysis technique was used to analyse the effect of independent variables (Thin capitalization, Leverage, Firms Size, Transfer Pricing, and Intangible Assets) on dependent variable (Corporate Tax Avoidance). The result showed that thin capitalisation, firm size, profitability, leverages, intangible assets, and transfer pricing are significantly related with corporate tax avoidance. Thin capitalisation, profitability and transfer pricing are the primary driver of corporate tax avoidance. It is concluded that there are several corporate tax avoidance practices employed by Nigerian firms to aggressively reduce their corporate tax liabilities in Nigeria.

The Use of Compensation for Tax Avoidance by Owners of Small Corporations

2005 ◽  
Vol 27 (1) ◽  
pp. 73-90
Author(s):  
Gregory G. Geisler ◽  
Sally Wallace
Keyword(s):  
Empirical Evidence ◽  
Tax Avoidance ◽  
Professional Services ◽  
Corporate Tax ◽  
Taxable Income ◽  
Marginal Change ◽  
Tax Returns ◽  
Using Data

This study provides empirical evidence on the extent to which taxes influence owners' compensation in small (fewer than 500 employees) Subchapter Selecting corporations (S corporations), taxable corporations that provide professional services (PSC corporations), and other taxable corporations (C corporations). Paying additional compensation to owner-employees likely increases the total after-tax income for PSC corporations with positive taxable income. Paying additional compensation to owner-employees is, however, less likely to increase the total after-tax income for C corporations and does not increase the total after-tax income for S corporations. Using data from the corporate tax returns of 503 small corporations, this study examines the marginal change in owners' compensation as taxable income changes. The study finds that, per dollar of taxable income, PSC corporations increase compensation to owneremployees significantly more than C corporations.

scholarly journals Preferential Income Tax Rate and Research and Development Investment: Evidence from Small and Medium-Sized Listed Firms in China

2019 ◽  
Vol 9 (1) ◽  
pp. 1
Author(s):  
Xiaobao Song ◽  
Chun Guo ◽  
Wunhong Su
Keyword(s):  
Propensity Score ◽  
Research And Development ◽  
Instrumental Variable ◽  
Income Tax ◽  
Positive Relation ◽  
Tax Rate ◽  
Listed Firms ◽  
External Impact ◽  
Instrumental Variable Method ◽  
The Impact

This study investigates the impact of a preferential income tax rate on research and development investment for small and medium-sized Chinese listed firms from 2013 to 2017. The results reveal a significantly positive relation between the preferential income tax rate and research and development investment. Such a positive relation appears to be more significant for non-state-owned firms and for firms located in provinces with higher research and development intensity. The instrumental variable method, the two-stage Heckman method and propensity score matching are employed in this study to support the finding that the preferential income tax rate has a positive external impact on research and development investment. The empirical results are robust with respect to endogeneity.

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