Is Foreign Direct Investment  Effective From The Perspective Of Tax Avoidance? An Analysis Of Tax Avoidance Through The International Transfer Pricing Behaviors Of Korean Corporations

Park, Sung Jin; Park, Woo Jin; Sun, Eun Jung; Woo, Sohee

doi:10.19030/jabr.v32i3.9664

Cited by 6 publications

(16 citation statements)

References 36 publications

(63 reference statements)

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“…Clausing (2006), Bernard, Jensen, & Schott (2009), Olibe & Rezaee (2008) find that firms' globle tax burdens are negatively associated with their intra-firm transactions. Park, Park, Sun, & Woo (2016) examine whether multinational companies carry out tax avoidance through subsidiaries. Their results show that MNCs use overseas transfer pricing behaviors to avoid tax actively when compared to firms without overseas subsidiaries.…”

Section: Anti-tax Avoidance Rules In Chinamentioning

confidence: 99%

“…The related parties' goods or service transaction ratio (OPER): H2 extends prior approaches by explicitly exploring whether companies with greater amounts of related party goods (or service) transactions will increase their ETRs after the implementation of Measures for Special Tax Adjustment. Jacob (1996) and Park et al (2016) examine whether multinational companies carry out tax avoidance through subsidiaries. Their results show that these firms actively avoid taxes using overseas TP behaviors, compared with companies without overseas subsidiaries.…”

Section: Hypothesis Variablesmentioning

confidence: 99%

“…Their results show that these firms actively avoid taxes using overseas TP behaviors, compared with companies without overseas subsidiaries. Following the procedures of Park et al (2016), this study uses the related parties' goods (or service) transaction amounts divided by total assets to measure the level of TP from related affiliates. We expect a positive relationship between the ETR and the interaction of DY09*OPER.…”

Section: Hypothesis Variablesmentioning

confidence: 99%

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Impact of Transfer Pricing for Special Tax Adjustment Measures on Corporate Effective Tax Rate in China

Wang¹,

Chen²

2020

ChnStd

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Corporate tax avoidance activities are prevalent in many countries, some of which have formulated anti-tax avoidance policies to curb such activities. China amended the chapter on special tax adjustment in the Enterprise Income Tax Law in 2008 and implemented Measures for Special Tax Adjustment in 2009. This study applies the Shanghai and Shenzhen A-share securities markets in 2005-2015 to investigate whether the implementation of Measures for Special Tax Adjustment has effectively curbed corporate tax avoidance activities and increased income tax costs. The empirical results indicate that company effective tax rates (ETRs) are increased significantly after the implementation of Measures for Special Tax Adjustment. And, companies with greater amounts of goods (or service) related party transactions significantly increased ETRs after the implementation of Measures for Special Tax Adjustment.

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Section: Anti-tax Avoidance Rules In Chinamentioning

confidence: 99%

Section: Hypothesis Variablesmentioning

confidence: 99%

Section: Hypothesis Variablesmentioning

confidence: 99%

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Impact of Transfer Pricing for Special Tax Adjustment Measures on Corporate Effective Tax Rate in China

Wang¹,

Chen²

2020

ChnStd

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“…The existence of FDI provides benefits such as economic growth, expanding employment, and increasing investment. According to Park et al (2016), companies with foreign direct investment have overseas subsidiaries. For this research, foreign direct investment is a dummy variable, where if a company has foreign direct investment, it will be given a point of 1 and if otherwise it will be given a point of 0.…”

Section: Definition and Measurement Of Research Variablesmentioning

confidence: 99%

The Influence of Tax Avoidance, Foreign Direct Investment and Capital Intensity Towards Earning Response Coefficient

Chandra

Mukhlasin²

2020

SCECO

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Earnings quality can be determined from the market or investor reaction to information in the published financial statements. But there are some factor, which can be considered to be biased for investors in determining their investment in a company. Market reaction can be proxy by earning response coefficient. This study aims to examine the effect of tax avoidance, foreign direct investment and capital intensity on earnings response coefficient. The population in this study is companies from manufacturing sector listed on the Indonesia Stock Exchange (IDX) for the period 2017-2019. Data obtained from the IDX website, Yahoo Finance and website of certain companies. The population of this study are 135 observation data. The hypothesis in this study were tested by multiple linear regression analysis. The result of this research are: 1) foreign direct investment and capital intensity have a positive effect on earnings response coefficient. 2) tax avoidance has no influence on earnings response coefficient.

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“…This model is a revision of Altman's bankruptcy prediction model which is appropriate to be used in manufacturing, non-manufacturing, and emerging market issuers. Finally, the tax aggressiveness variable is measured using the formulas from Desai and Dharmapala (2006) in Park et al (2016).…”

Section: Introductionmentioning

confidence: 99%

Managerial Ability, Management Compensation, Bankruptcy Risk, Tax Aggressiveness

Nurfauzi

Firmansyah

2018

accounting, auditing, information

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<p class="Text">Manager with higher ability tends to have a deeper understanding of the firm’s strengths and weaknesses to take full advantage of opportunities, including an opportunity to do tax aggressiveness which is undetected by the tax authorities. In addition, the compensation received by management can also be a motivation for managers to act aggressively. Furthermore, the high risk of bankruptcy also puts pressure on managers to do cash tax saving aggresively in order to maintain the company's life.</p><p class="Text">This study is aimed to examine the effect of managerial ability, management compensation and bankruptcy risk on tax aggressiveness. The sample used in this research are manufacturing companies listed on the Indonesia Stock Exchange (BEI) during the period of 2011 to 2015. Using purposive sampling, this research obtained data from 36 companies. So the total sample in this study amounts to 180 observation data.</p>Managerial ability is measured by Data Envelopment Analysis (DEA) and Tobit regression referring to Park et al (2015). Management compensation is measured by the total compensation received by the director during the fiscal year (Armstrong, Blouin and Larcker, 2012). Then the risk variables of bankruptcy will be measured by Altman’s prediction model of bankruptcy (Altman and Hotchkiss, 1995, 2006). The result shows that managerial ability has a positive significant effect on tax aggressiveness. Meanwhile, management compensation has a significant negative effect on tax aggressiveness. Furthermore, the bankruptcy risk has a significant positive effect on tax aggressiveness

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Is Foreign Direct Investment Effective From The Perspective Of Tax Avoidance? An Analysis Of Tax Avoidance Through The International Transfer Pricing Behaviors Of Korean Corporations

Cited by 6 publications

References 36 publications

Impact of Transfer Pricing for Special Tax Adjustment Measures on Corporate Effective Tax Rate in China

Impact of Transfer Pricing for Special Tax Adjustment Measures on Corporate Effective Tax Rate in China

The Influence of Tax Avoidance, Foreign Direct Investment and Capital Intensity Towards Earning Response Coefficient

Managerial Ability, Management Compensation, Bankruptcy Risk, Tax Aggressiveness

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