The Impact of Microeconomic and Macroeconomic Factors on Financial Structure: Evidence from United States

The research aims to determine the impact of foreign investor’s interests on tax avoidance in Consumer Goods- Manufacturing Companies, in particular the food and beverage sector, listed in Indonesia Stock Exchange during the periods from 2011 to 2016. The interests of foreign investors are measured by two variable which are the percentage of ownership by foreign investors and the percentage of foreign directors and commisoners on the board directors. The methodology used in this research is sampling method, tested by multiple linear regression. Tax avoidance is measured by two approaches, i.e. Effective Tax Rate and Book Tax Different. This research concludes that the percentage of ownership by foreign investors and the percentage of foreign directors and commisoners on board directors show no significant effect to the corporate tax avoidance. Tujuan penulisan makalah ini adalah untuk mengetahui pengaruh proporsi kepemilikan saham asing dan proporsi direktur dan komisaris asing terhadap penghindaran pajak di perusahaan manufaktur sektor industri barang konsumsi sub sektor makanan dan minuman yang terdaftar di Bursa Efek Indonesia selama peiode tahun 2011 sampai dengan 2016. Teknik pengambilan sampel menggunakan metode purposive sampling, diuji dengan metode regresi linier berganda. Pengujian dilakukan dengan dua pendekatan yaitu Effective Tax Rate dan Book Tax Different. Berdasarkan hasil penelitian dapat disimpulkan bahwa dengan pendekatan ETR, proporsi kepemilikan saham asing tidak berpengaruh positif atas penghindaran pajak, namun proporsi direktur dan komisaris asing berpengaruh positif terhadap penghindaran pajak meskipun tidak signifikan. Sedangkan dengan pendekatan BTD proporsi kepemilikan saham asing bepengaruh positif terhadap penghindaran pajak meskipun tidak signifikan, dan proporsi direktur dan komisaris asing tidak berpengaruh positif terhadap penghindaran pajak.

DAMPAK KEBIJAKAN DAN MAKROEKONOMI TERHADAP EFEKTIVITAS PENERIMAAN PAJAK DI BURSA EFEK INDONESIA

MIX JURNAL ILMIAH MANAJEMEN ◽

10.22441/mix.2018.v8i2.013 ◽

2018 ◽

Vol 8 (2) ◽

pp. 400

Author(s):

Mursal Harahap ◽

Bonar M Sinaga ◽

Adler H Manurung ◽

Tubagus Nur Ahmad Maulana

Keyword(s):

Annual Report ◽

Stock Exchange ◽

Equation System ◽

Simultaneous Equation ◽

Tax Revenue ◽

Effective Tax Rate ◽

Tax Rate ◽

Simultaneous Equation System ◽

Seidel Method ◽

The Impact

Abstract. The purpose of this research is to analyse the impact of policy and macroeconomic change on tax revenue and its effectiveness in Consumer Goods Industry sector (CGI) and Infrastructure, Utilities and Transport (IUT) sector. The analysis employed simultaneous equation system model estimated with 2SLS and simulation with Seidel method. Data was collected from annual report of the companies which listed on Indonesia Stock Exchange. The results showed that the change of tax receipts and effective tax rate (ETR) happened due to changing in policy and macroeconomics in the CGI sector which is greater than the IUT sector. Furthermore, if the rupiah exchange rate depreciates, the policy regarding tax rate increment could increase tax revenue and ETR which is greater than the BI rate reduction policy in both sectors.

Exploring the Determinants of Financial Structure in the Technology Industry: Panel Data Evidence from the New York Stock Exchange Listed Companies

Journal of Risk and Financial Management ◽

10.3390/jrfm12040163 ◽

2019 ◽

Vol 12 (4) ◽

pp. 163 ◽

Cited By ~ 1

Author(s):

Vintilă ◽

Gherghina ◽

Toader

Keyword(s):

New York ◽

Panel Data ◽

Stock Exchange ◽

Financial Structure ◽

New York Stock Exchange ◽

Debt Ratio ◽

Technology Industry ◽

York Stock Exchange ◽

Dependent Variables ◽

The Impact

This paper aims to analyze the influencing factors on the financial structure of 51 companies listed on the New York Stock Exchange, in the technology industry, from 2005–2018. The objective is to see the impact of independent company-specific variables such as company size, tangibility of assets, growth opportunity, effective tax rate, current liquidity, depreciation, stock rotation, financial return, working capital, price to book value, price to earnings ratio, as well as the impact of governance variables and macroeconomic variables such as inflation rate, interest rate, market size, gross domestic product per capita. Using panel data and multiple linear regressions, we analyze the relationship between the independent variables listed above and the dependent variables, namely the total debt ratio, the long-term debt ratio and the short-term debt ratio. The results of the analysis showed that variables such as size, tangibility, liquidity, profitability have a significant influence on the dependent variables in accordance with the theories regarding the capital structure.

Macroeconomic Factors as a Predictor of Stock Market: Empirical Evidences from India, U.S. and U.K.

International Journal of Recent Technology and Engineering - 2 ◽

10.35940/ijrte.b1133.0982s1019 ◽

2019 ◽

Vol 8 (2S10) ◽

pp. 743-751

Keyword(s):

New York ◽

Stock Market ◽

Stock Exchange ◽

Consumer Price Index ◽

Data Sets ◽

Causality Test ◽

Monthly Basis ◽

Macroeconomic Factors ◽

Long Run ◽

The Impact

The study investigated the impact of Macroeconomic variables such as: Gross Domestic Product (GDP), The Index of Industrial Production (IIP), Consumer Price Index (CPI), Foreign-exchange reserves (also called forex reserves or FX reserves), International Crude Price (CP) on selected stock market, namely Indian Stock Market (S&P BSE SENSEX (BSE 30) index, S&P CNX Nifty index (NIFTY 50), London Stock Exchange (Financial Times Stock Exchange 100 Index (FTSE 100) and New York Stock Exchange Dow Jones Industrial Average (Dow 30). The data sets of all variables have been considered from April, 2001 to March, 2018 on a monthly basis. The study reveals long run relationship among the variables and the results of Granger Causality test reveals unidirectional, bilateral relation (Feedback) and exogeneity (Independence) among the variables.

THE ROLE OF CORPORATE DIVERSIFICATION IN TAX AVOIDANCE IN COMPANIES LISTED IN THE TEHRAN STOCK EXCHANGE

Humanities & Social Sciences Reviews ◽

10.18510/hssr.2019.7133 ◽

2019 ◽

Vol 7 (1) ◽

pp. 291-299

Author(s):

Mohammad Vahdani ◽

Abdolhossein Talebi Najafabadi ◽

Narjes Kamali Kermani ◽

Zahra Farhadi

Keyword(s):

Confidence Level ◽

Stock Exchange ◽

Tax Avoidance ◽

Financial Information ◽

Corporate Diversification ◽

Effective Tax Rate ◽

Tax Rate ◽

The Government ◽

A Charge ◽

The Impact

Purpose of the Study: Tax avoidance means the use of gaps in tax laws for non-payment or late payment of taxes for companies, which is affected by different factors. The present study investigates the impact of diversification on tax avoidance in companies. To this end, the financial information of 384 firms during the period of 2011- 2016 in the Tehran Stock Exchange was examined. Methodology: In this research, the required financial information was summarized, classified, and calculated in Excel software and the data were analyzed by using E-views software. The dependent variables were effective tax rate and book-tax difference, while the independent variable was corporate diversification, which shows how to divide the market between business sectors (units) in a company. Control variables include size, financial leverage, company’s loss-making, ROA, capital expenditures, R&D, market to book value, CEO ownership, and management of ownership. Conclusions/Results: The findings obtained from this study demonstrate that at a 95% confidence level, there is no significant relationship between diversification and effective tax rates in companies listed in the Tehran Stock Exchange. However, at a 90% confidence level, diversification reduces the effective tax rate. Furthermore, no reliable evidence was found regarding the effect of diversification on book-tax difference at a 95% confidence level. Novelty: Tax is a charge imposed by the government on all organizational profits. Various enterprises have complex operations due to their institutional structure, which makes it possible to increase tax avoidance in these companies. The production or sale of a variety of products (diversification) is bigger and has more complex organizational structures that increase the cost of management and non-management decisions, making it difficult for companies to coordinate their policies. Thematic classification: G10, M41

Do Overlapped Audit Committee Directors Affect Tax Avoidance?

Journal of Risk and Financial Management ◽

10.3390/jrfm14100487 ◽

2021 ◽

Vol 14 (10) ◽

pp. 487

Author(s):

Hidaya Al Lawati ◽

Khaled Hussainey

Keyword(s):

Financial Institutions ◽

Audit Committee ◽

Stock Exchange ◽

Research Question ◽

Tax Avoidance ◽

Effective Tax Rate ◽

Tax Rate ◽

The Impact ◽

A Company ◽

Advisory Role

This research is motivated by the Omani government’s desire to reduce tax avoidance and bolster tax revenue collected from financial institutions. The purpose of this paper is to examine the impact of overlapped audit committee (AC) chairs and other directors on tax avoidance practice and whether they play a monitoring or advisory role in tax avoidance practice. As a measure of overlapped AC chairs, we used a dummy variable to indicate whether an AC chair sits on other committees within a company or not. We used the proportion of AC members who serve on the AC and other committees within a company as our proxy for overlapped AC directors. We used a company’s cash effective tax rate as a proxy for tax avoidance. We regressed tax avoidance on overlapped AC membership and other control variables, using a sample of 204 firm-year observations from financial institutions listed on the Muscat Stock Exchange between 2014 and 2019. Our regression results show that a higher proportion of overlapped AC members and the presence of an overlapped AC chair were both associated with lower effective tax rates, which equated to more tax avoidance. This suggests that these directors play an advisory role in the Omani context. We found, however, that these directors play a monitoring role when firms take a loss. From these findings, we draw important implications for regulators who need to rethink the potential consequences of having overlapped AC chairs and AC directors. Our study focuses on Omani financial institutions, which are highly regulated and monitored by the central bank, and our findings may not be directly applicable to non-financial institutions that are less regulated, so caution is needed when interpreting the findings. Further research could employ a repeated measured research design, such as ours, and explore the same research question in non-financial institutions.

Tax Rates and Tax Revenues in the Context of Tax Competitiveness

Journal of Risk and Financial Management ◽

10.3390/jrfm14070284 ◽

2021 ◽

Vol 14 (7) ◽

pp. 284

Author(s):

Martina Helcmanovská ◽

Alena Andrejovská

Keyword(s):

Tax Rates ◽

Corporate Tax ◽

Effective Tax Rate ◽

Member States ◽

Tax Rate ◽

Eu Member States ◽

Tax Revenues ◽

Macroeconomic Indicators ◽

New States ◽

The Impact

The diverse tax burdens and economic situations of EU member states are causing investors to relocate their investments to countries that offer better tax conditions and a better economic environment. The total amount of corporate tax revenue is therefore influenced by tax, macroeconomic and other indicators. This paper assesses the importance of tax revenues and tax rates in the context of tax competitiveness in EU states. The aim of the paper is to determine the impact of selected indicators on corporate tax revenues in EU states for the period 2004 to 2019. The source data were drawn from the databases of the European Commission (2021) and The World Bank (2021). The set goal was complemented by an analysis of tax rates and subsequent comparison with corporate tax revenues. Multiple regression analysis was performed to achieve the goal. Two econometric models were compiled that followed the same variables, with the EU13 model dealing with the new member states and the EU15 model dealing with the old EU member states. The results showed that the variables statutory and average effective tax rate do not have a decisive influence on corporate tax revenues in either model. In the new states, the unemployment rate has the most statistically significant effect, while in the old countries GDP has the biggest effect. The result of this work is that there are differences between the new and old member states at different levels, which was ultimately reflected in the different impact of tax and macroeconomic indicators on corporate tax revenues.

Board Meeting Attendance and Corporate Tax Avoidance: Evidence from the UK

Business Perspectives and Research ◽

10.1177/2278533719860021 ◽

2019 ◽

Vol 8 (1) ◽

pp. 51-66 ◽

Cited By ~ 1

Author(s):

Victor Barros ◽

Joaquim Miranda Sarmento

Keyword(s):

Stock Exchange ◽

Tax Avoidance ◽

Board Members ◽

Opportunistic Behavior ◽

Attendance Rate ◽

Corporate Tax ◽

Effective Tax Rate ◽

Tax Rate ◽

The Uk ◽

The Impact

Is corporate tax avoidance associated with board meetings and attendance? Despite the large amount of research in management and finance on the impact of boards in several firm decisions, there is very little research that associates boards with tax avoidance. In this article, we look at firms listed on the London Stock Exchange during the period 2002–2015 and analyze whether a higher frequency of board meetings in the UK is associated with lower corporate tax liability. Our findings show that board meetings and attendance rate exert opposite effects, although the frequency of meetings is associated with lowering the tax liability. However, the association does not hold in a linear way. Tax-avoiding firms pay about 3 percent less effective tax rate, which is associated with average levels of meetings frequency, whereas those in the upper tail of the effective tax rate distribution benefit from a combined decrease of about 5–6 percent in the effective tax rate. The results conclusively support the view that a more resilient and focused control of board members mitigates opportunistic behavior and rent-seeking, thus enabling managers to engage in tax avoidance strategies.

THE IMPACT OF THE 2009 INDONESIA’S DIVIDEND TAX CUT ON DIVIDEND PAYMENT

JURNAL PAJAK INDONESIA (Indonesian Tax Review) ◽

10.31092/jpi.v2i2.228 ◽

2019 ◽

Vol 2 (2) ◽

pp. 1-5

Author(s):

I Wayan Agus Eka

Keyword(s):

Positive Impact ◽

Stock Exchange ◽

Effective Tax Rate ◽

Intensive Margin ◽

Dividend Payment ◽

Tax Rate ◽

One Year ◽

The Impact ◽

Dividend Tax ◽

Nominal Amount

On January 1, 2009 the effective tax rate for individual-recipient dividend fell significantly from 35% to 10%. This paper investigated the impact of the dividend tax cut policy on dividend payment in three aspects i.e. extensive margin, intensive margin and dividend per share amount, an adoption from Chetty and Saez (2004) approach. I used publicly available data provided by The Indonesian Stock Exchange and The Indonesian Central Securities Depository. I found that one year after the tax cut policy, the fraction of the firms paying dividend increase and reach its peak in 2011. From intensive margin approach, the percentage of firms that increase their dividend per share amount also increase one year after the policy. Using regression analysis, this paper also found that the tax cut policy increased the dividend per share amount by 35.03. This study, to my knowledge, provides the first empirical evidence of the effect of dividend tax cut policy and concludes that the policy has positive impact on dividend payment in term of fraction of firms paying dividend, fraction of firms increasing their dividend and the nominal amount of the dividend per share.

The Random Forest Method in Research of Impact of Macroeconomic Indicators of Regional Development on Informal Employment Rate

Voprosy statistiki ◽

10.34023/2313-6383-2020-27-6-37-55 ◽

2020 ◽

Vol 27 (6) ◽

pp. 37-55

Author(s):

E. V. Zarova ◽

E. I. Dubravskaya

Keyword(s):

Random Forest ◽

Regional Development ◽

Russian Federation ◽

Regional Level ◽

Informal Employment ◽

Macroeconomic Factors ◽

Random Forest Method ◽

Macroeconomic Indicators ◽

The Russian Federation ◽

The Impact

The topic of quantitative research on informal employment has a consistently high relevance both in the Russian Federation and in other countries due to its high dependence on cyclicality and crisis stages in economic dynamics of countries with any level of economic development. Developing effective government policy measures to overcome the negative impact of informal employment requires special attention in theoretical and applied research to assessing the factors and conditions of informal employment in the Russian Federation including at the regional level. Such effects of informal employment as a shortfall in taxes, potential losses in production efficiency, and negative social consequences are a concern for the authorities of the federal and regional levels. Development of quantitative indicators to determine the level of informal employment in the regions, taking into account their specifics in the general spatial and economic system of Russia are necessary to overcome these negative effects. The article proposes and tests methods for solving the problem of assessing the impact of hierarchical relationships on macroeconomic factors at the regional level of informal employment in constituent entities of the Russian Federation. Majority of the works on the study of informal employment are based on basic statistical methods of spatial-dynamic analysis, as well as on the now «traditional» methods of cluster and correlation-regression analysis. Without diminishing the merits of these methods, it should be noted that they are somewhat limited in identifying hidden structural connections and interdependencies in such a complex multidimensional phenomenon as informal employment. In order to substantiate the possibility of overcoming these limitations, the article proposes indicators of regional statistics that directly and indirectly characterize informal employment and also presents the possibilities of using the «random forest» method to identify groups of constituent entities of the Russian Federation that have similar macroeconomic factors of informal employment. The novelty of this method in terms of research objectives is that it allows one to assess the impact of macroeconomic indicators of regional development on the level of informal employment, taking into account the implicit, not predetermined by the initial hypotheses, hierarchical relationships of factor indicators. Based on the generalization of the studies presented in the literature, as well as the authors’ statistical calculations using Rosstat data, the authors came to the conclusion about the high importance of macroeconomic parameters of regional development and systemic relationships of macroeconomic indicators in substantiating the differentiation of the informal level across the constituent entities of the Russian Federation.