Investigating the Impact of Tax Avoidance on Investment Efficiency

Document Type : Research Paper

Authors

1 Assistant Professor of Accounting, Shahid Bahonar University of Kerman, Kerman, Iran.

2 M.A. Student of Accounting, Shahid Bahonar University of Kerman, Kerman, Iran.

10.22103/jak.2020.14368.3027

Abstract

Objective: The objective of this study was to investigate the effects of tax avoidance on the investment efficiency of the companies listed in the Tehran Stock Exchange, TSE. To measure tax avoidance and investment efficiency, we used the cash effective tax rate and the Richardson (2006) model, respectively.
Method: A sample of 152 companies listed in the TSE from 2009 to 2018 was selected to test the research hypothesis, using a panel data least squares regression model.
Results: Findings showed that an increase in tax avoidance reduces the efficiency of the company's investment.
Conclusion: Although tax avoidance activities require hiding the facts and the performance of complex transactions that lead to opportunistic behaviors of management and reducing the company's investment efficiency, in Iran, tax avoidance is a procedure not necessarily intended to create efficiency, but one that typically followed by companies.

Keywords

References

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History

  • Receive Date: 23 July 2019
  • Revise Date: 09 November 2019
  • Accept Date: 24 December 2019

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