Elaoud, Assawer
Investment efficiency, tax avoidance, and external audit evidence of European Companies / Assawer Elaoud, Anis Jarboui .-- , 2021
Resumen.
This article looks at the impact of external audit and tax avoidance behavior on investment problems such as under-investment and over-investment. More specifically, this article adds value to the literature by examining how external audit moderates the relationship between business tax avoidance and investment problems. The authors employ a large sample of European companies listed in the STOXX Europe 600 index over the 2013–2017 period. This sample includes 9 sectors and 17 countries. The regression results show that tax avoidance is significantly negative in terms of investment efficiency and that it increases the over-investment problem. Indeed, when managers forgo investments that produce positive net present value through tax avoidance, companies could be exposed to a problem of over-investment. In addition, the results show that external auditors moderate the behavior of tax avoidance with regard to investment efficiency and over-investment. Audit quality, measured by three proxies, reduces agency costs and improves investment efficiency. These outcomes are robust in relation to other measurements of both investment efficiency and tax avoidance.
INVERSIONES EMPRESARIALES
EFICIENCIA
ELUSION FISCAL
AUDITORIA FISCAL
INSPECCION TRIBUTARIA
MODELOS ECONOMETRICOS
Jarboui, Anis
Journal of Taxation of Investments 0747-9115v. 39, n. 1, Fall 2021, p. 27-48
Investment efficiency, tax avoidance, and external audit evidence of European Companies / Assawer Elaoud, Anis Jarboui .-- , 2021
Resumen.
This article looks at the impact of external audit and tax avoidance behavior on investment problems such as under-investment and over-investment. More specifically, this article adds value to the literature by examining how external audit moderates the relationship between business tax avoidance and investment problems. The authors employ a large sample of European companies listed in the STOXX Europe 600 index over the 2013–2017 period. This sample includes 9 sectors and 17 countries. The regression results show that tax avoidance is significantly negative in terms of investment efficiency and that it increases the over-investment problem. Indeed, when managers forgo investments that produce positive net present value through tax avoidance, companies could be exposed to a problem of over-investment. In addition, the results show that external auditors moderate the behavior of tax avoidance with regard to investment efficiency and over-investment. Audit quality, measured by three proxies, reduces agency costs and improves investment efficiency. These outcomes are robust in relation to other measurements of both investment efficiency and tax avoidance.
INVERSIONES EMPRESARIALES
EFICIENCIA
ELUSION FISCAL
AUDITORIA FISCAL
INSPECCION TRIBUTARIA
MODELOS ECONOMETRICOS
Jarboui, Anis
Journal of Taxation of Investments 0747-9115v. 39, n. 1, Fall 2021, p. 27-48