Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance
The purpose of this study is to empirically investigate the effect of financial constraints and corporate governance as moderating variables on the determinants of tax avoidance, which includes foreign activity, corporate social responsibility, and political connections. All companies listed on the...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
LLC "CPC "Business Perspectives"
2022-03-01
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| Series: | Investment Management & Financial Innovations |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16267/IMFI_2022_01_Silvera.pdf |
| _version_ | 1818774169822691328 |
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| author | Dica Lady Silvera Achmad Hizazi M. Syurya Hidayat Sri Rahayu |
| author_facet | Dica Lady Silvera Achmad Hizazi M. Syurya Hidayat Sri Rahayu |
| author_sort | Dica Lady Silvera |
| collection | DOAJ |
| description | The purpose of this study is to empirically investigate the effect of financial constraints and corporate governance as moderating variables on the determinants of tax avoidance, which includes foreign activity, corporate social responsibility, and political connections. All companies listed on the Indonesia Stock Exchange from 2017 to 2019 are the objects of this study. The panel data regression was used to address the research question. The findings show that foreign activity, corporate social responsibility, and political connections significantly affected tax avoidance with alpha 5%. The results also show that corporate governance can reduce the positive impact of foreign activity, corporate social responsibility, and political connection on tax avoidance with alpha 1%.Moreover, financial constraints may strengthen the positive impact of corporate social responsibility on tax avoidance with alpha 5%. The findings further provide empirical evidence about one of the strategies businesses use to conduct tax avoidance, notably foreign activity, corporate social responsibility, and political connection. Thus, companies that implement good corporate governance could reduce corporate tax avoidance acts, which can harm the company’s image and lead to a decrease in company value. This study discovered a new proxy for measuring financial constraints, as well as developments in the political connection. |
| first_indexed | 2024-12-18T10:36:53Z |
| format | Article |
| id | doaj.art-a35a1d94f23d4edd949354a96b68d52d |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2024-12-18T10:36:53Z |
| publishDate | 2022-03-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-a35a1d94f23d4edd949354a96b68d52d2022-12-21T21:10:44ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582022-03-0119127428610.21511/imfi.19(1).2022.2116267Financial constraints and corporate governance as moderating variables for the determinants of tax avoidanceDica Lady Silvera0https://orcid.org/0000-0003-0594-6391Achmad Hizazi1https://orcid.org/0000-0002-3470-4888M. Syurya Hidayat2https://orcid.org/0000-0002-9279-325XSri Rahayu3https://orcid.org/0000-0002-9508-378XDr., Doctoral Student, Faculty of Economics and Business, Accounting Department, Universitas JambiDr., Associate Professor, Faculty of Economics and Business, Accounting Department, Universitas JambiDr., Associate Professor, Faculty of Economics and Business, Economics Department, Universitas JambiDr., Associate Professor, Faculty of Economics and Business, Accounting Department, Universitas JambiThe purpose of this study is to empirically investigate the effect of financial constraints and corporate governance as moderating variables on the determinants of tax avoidance, which includes foreign activity, corporate social responsibility, and political connections. All companies listed on the Indonesia Stock Exchange from 2017 to 2019 are the objects of this study. The panel data regression was used to address the research question. The findings show that foreign activity, corporate social responsibility, and political connections significantly affected tax avoidance with alpha 5%. The results also show that corporate governance can reduce the positive impact of foreign activity, corporate social responsibility, and political connection on tax avoidance with alpha 1%.Moreover, financial constraints may strengthen the positive impact of corporate social responsibility on tax avoidance with alpha 5%. The findings further provide empirical evidence about one of the strategies businesses use to conduct tax avoidance, notably foreign activity, corporate social responsibility, and political connection. Thus, companies that implement good corporate governance could reduce corporate tax avoidance acts, which can harm the company’s image and lead to a decrease in company value. This study discovered a new proxy for measuring financial constraints, as well as developments in the political connection.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16267/IMFI_2022_01_Silvera.pdfcorporate governancecorporate social responsibilityfinancial constraintforeign activitypolitical connectiontax avoidance |
| spellingShingle | Dica Lady Silvera Achmad Hizazi M. Syurya Hidayat Sri Rahayu Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance Investment Management & Financial Innovations corporate governance corporate social responsibility financial constraint foreign activity political connection tax avoidance |
| title | Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance |
| title_full | Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance |
| title_fullStr | Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance |
| title_full_unstemmed | Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance |
| title_short | Financial constraints and corporate governance as moderating variables for the determinants of tax avoidance |
| title_sort | financial constraints and corporate governance as moderating variables for the determinants of tax avoidance |
| topic | corporate governance corporate social responsibility financial constraint foreign activity political connection tax avoidance |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16267/IMFI_2022_01_Silvera.pdf |
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