scholarly journals How do financial constraints affect the relationship between corporate tax avoidance and firm investment? Evidence from Thai listed firms

2021 ◽  
Vol 42 (3) ◽  
Keyword(s):  
Financial Constraints ◽  
Tax Avoidance ◽  
Firm Investment ◽  
Corporate Tax ◽  
Listed Firms ◽  
The Relationship

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.

Mixed ownership reform and corporate tax avoidance: Evidence of Chinese listed firms

2021 ◽  
Vol 69 ◽  
pp. 101648
Author(s):  
Wei Wang ◽  
Hua Wang ◽  
Ji (George) Wu
Keyword(s):  
Tax Avoidance ◽  
Corporate Tax ◽  
Listed Firms ◽  
Ownership Reform

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 Non-linear response of firm investment to q: Evidence from Greek listed firms

2019 ◽  
Vol 9 (1) ◽  
pp. 53-63 ◽  
Author(s):  
Christos Kallandranis
Keyword(s):  
Stock Exchange ◽  
Adjustment Costs ◽  
Firm Investment ◽  
Dynamic Panel ◽  
Dynamic Panel Model ◽  
Listed Firms ◽  
Panel Model ◽  
Multiple Regimes ◽  
Athens Stock Exchange ◽  
The Relationship

A dynamic-panel model is applied in order to empirically investigate the relationship between business fixed investment and Tobin’s q for the firms listed in the Athens Stock Exchange (ASE). In particular, we search for non-linearities in the underlying relationship between investment and fundamentals, consistent with the presence of multiple regimes. The empirical results support a discontinuity identifying two-regimes: (a) wherein the first (for values of q below a certain threshold) investment is inelastic to q, while in the second it exhibits a positive relationship, and b) a further non-linearity expressed in a concavity of the investment- q relationship implying that for the segment where investment reacts to fundamentals positively, it does so at a decreasing rate evidence which is consistent with the presence of non-convexities in adjustment costs

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.

scholarly journals Pyramid ownership structure and tax avoidance among Canadian firms

2019 ◽  
Vol 33 (1) ◽  
pp. 16-33 ◽  
Author(s):  
Justin Mindzak ◽  
Tao Zeng
Keyword(s):  
Ownership Structure ◽  
Empirical Work ◽  
Tax Avoidance ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Ownership Structure ◽  
Cash Flow Rights ◽  
And Control ◽  
The Impact ◽  
The Relationship

Purpose This paper aims to examine the relationship between pyramid ownership structure and tax avoidance. Design/methodology/approach This paper is an empirical work using a sample of Canadian listed firms. Findings Relying on several proxies for tax avoidance, the authors find that firms affiliated with pyramidal structures generally engage in more tax avoidance activities than non-affiliated firms; firms affiliated with more complex pyramids engage in more tax avoidance practices and firms located at the lower tiers of the pyramids avoid more taxes; and some pyramid-affiliated firms with larger deviation between controlling shareholders’ cash flow rights and control rights engage in more tax avoidance practices. Social implications A broader understanding of the relationship between pyramidal structure and tax avoidance can be pursued by including firms in other countries, where the pyramid groups (pyramid structure) are prevalent, but institutional environments differ from that of Canada. Originality/value This study highlights the importance of pyramid ownership in shaping tax avoidance activities among Canadian-listed firms. Canada provides an ideal setting for studying the impact of ownership structure, as it contains a diverse corporate ownership structure ranging from widely held freestanding firms to pyramidal business groups.

scholarly journals Does access to credit reduce SMEs’ tax avoidance? Evidence from a regression discontinuity design

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Xiaowei Kong ◽  
Deng-Kui Si ◽  
Haiyang Li ◽  
Dongmin Kong
Keyword(s):  
Financial Constraints ◽  
Regression Discontinuity ◽  
Tax Avoidance ◽  
Bank Lending ◽  
Rent Seeking ◽  
Policy Implications ◽  
Regression Discontinuity Design ◽  
Corporate Tax ◽  
Access To Credit ◽  
Travel Costs

AbstractThis study investigates the effect of targeted reserve requirement ratio cuts (TRRRCs) on tax avoidance among small and micro enterprises (SMEs) with operating revenues below specific cutoffs in China. Using a regression discontinuity design, we causally show that, by increasing loan availability, TRRRCs significantly alleviate the financial constraints and cash dependence of SMEs and consequently reduce tax avoidance. This is especially the case among firms with lower market power and higher entertainment and travel costs. Our findings provide evidence for the real effect of TRRRCs on corporate tax avoidance and show the inclusive effect of TRRRCs on SMEs. In doing so, we indirectly reveal a rent-seeking channel underlying bank lending, thus offering clear policy implications for regulators.

The Political Economy of Taxation: Some Evidence for Canada

1988 ◽  
Vol 16 (3) ◽  
pp. 315-329 ◽  
Author(s):  
André Blais ◽  
François Vaillancourt
Keyword(s):  
Manufacturing Industry ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Corporate Tax ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Independent Variables ◽  
Methodological Problems ◽  
Canadian Manufacturing ◽  
The Relationship

The article examines the determinants of variations in the effective average tax rate among Canadian manufacturing industry. It replicates a previous study (Salomon and Siegfried, 1977) on the U.S. corporate tax that found relationships between the economic structure and tax avoidance rates. Some methodological problems in the study are identified, which raise doubts about their conclusions. It is shown that effective tax rates fluctuate substantially over time and that the results may be sensitive to the year selected for analysis. As a consequence, tax-avoidance rates are regressed against a number of independent variables in two different years: 1974 and 1979. The overall weakness of the relationship is striking. With our best measure of the tax-avoidance rate, 2 out of 12 variables are significant in 1974 and one in 1979. These findings suggests that the corporate income tax may not be as important an instrument of industrial policy as it is sometimes claimed to be.

scholarly journals Tax Avoidance and Firm Value Relationship in the Listed Companies of Bangladesh: A Conceptual Overview

2020 ◽  
Vol 5 (2) ◽  
pp. 23
Author(s):  
Md. Nazrul Islam ◽  
Fathyah Hashim
Keyword(s):  
Firm Value ◽  
Tax Avoidance ◽  
Listed Companies ◽  
Agency Conflicts ◽  
Stock Market Index ◽  
Corporate Tax ◽  
Corporate Managers ◽  
Listed Firms ◽  
Market Index ◽  
Value Association

The aim of the present paper is to look at whether corporate tax avoidance (CTA) contributes to firm value in the perspective of Bangladeshi listed firms. Our conceptual assumption is that in presence of agency conflicts, corporate managers take on tax avoidance (TA) initiatives to extract their own benefits through taking advantage as of the loopholes of current tax laws. Further, CTA does not fulfill the ethical and social demands. Agency costs and social irresponsibility that produce from TA activities could adversely influence the firm value. It is also among the first paper focusing on the TA and firm value association in the perspective of Bangladeshi listed firms after the gradual decline of stock market index during the year 2019, whereas most of the adjacent South Asian countries’ bourse has achieved gradual improve. However, the present paper aims to integrate relevant studies and theories to extend the intended potentials for limiting corporate tax avoidance to enhance the value of the listed companies in Bangladesh. This study has evaluated CTA behavior from a combination of agency theory and stakeholder theory standpoint rather than traditional sight of tax burden decreasing strategy. Moreover, as existing literature reveals inconsistent and less evidence that attempt to examine the consequence of CTA on firm value, the present paper proposes and shows an imperative proposition for potential empirical research.

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