The Influence of Brand Value on Tax Avoidance with Ownership Concentration as a Moderating Variable
Abstract
The present investigation was prompted by different viewpoints on evaluating the effect of brand value on either the promotion or prohibition of tax avoidance strategies. Using the Agency Theory framework, it also intends to investigate how the concentration of ownership affects the relationship between brand value and tax avoidance strategies of enterprises listed in Indonesia. Researchers believe that by merging these studies and viewpoints, the ruling shareholders will emphasize managerial scrutiny to minimize tax avoidance and protect the company’s brand. The sample used in this research is based on 151 observations of 47 entities listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. ? panel regression with a random effects model was employed in the present research. The endpoint of this research is to look at the impact of brand value on tax avoidance and the role of ownership concentration as a moderator in the association between brand value and tax avoidance. The results suggest that the increasing brand value contributes to reducing tax avoidance. This study also finds that ownership concentration significantly impacts the relationship between brand value and tax avoidance.
Keywords: tax avoidance, brand value, firm reputation, ownership concentration
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References
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Cabello, O. G., Gaio, L. E., & Watrin, C. (2019). Tax avoidance in management-owned firms: evidence from Brazil. International Journal of Managerial Finance, 15(4), 580–592. https://doi.org/10.1108/IJMF-04-2018-0117
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Dinh, T. H. T., Nguyen, C. C., & Gan, C. (2023). Ownership concentration, financial reporting quality and investment efficiency: an empirical analysis of Vietnamese listed firms. International Journal of Social Economics, 50(1), 111–127. https://doi.org/10.1108/IJSE-03-2022-0200
Fan, S., Chen, J., & Han, H. (2023). Ownership concentration and accounting information consistency—evidence from Chinese listed companies. Asian Review of Accounting, 31(1), 86–113. https://doi.org/10.1108/ARA-01-2022-0012
Fetscherin, M. (2019). The five types of brand hate: How they affect consumer behavior. Journal of Business Research, 101, 116–127. https://doi.org/10.1016/j.jbusres.2019.04.017
Foroudi, P. (2019). Influence of brand signature, brand awareness, brand attitude, brand reputation on hotel industry’s brand performance. International Journal of Hospitality Management, 76, 271–285. https://doi.org/10.1016/j.ijhm.2018.05.016
Gaaya, S., Lakhal, N., & Lakhal, F. (2017). Does family ownership reduce corporate tax avoidance? The moderating effect of audit quality. Managerial Auditing Journal, 32(7), 731–744. https://doi.org/10.1108/MAJ-02-2017-1530
Geng, Y., Liu, W., Li, K., & Chen, H. (2021). Environmental regulation and corporate tax avoidance: A quasi-natural experiment based on the eleventh Five-Year Plan in China. Energy Economics, 99. https://doi.org/10.1016/j.eneco.2021.105312
Haberstroh, K., Orth, U. R., Hoffmann, S., & Brunk, B. (2017). Consumer Response to Unethical Corporate Behavior: A Re-Examination and Extension of the Moral Decoupling Model. Journal of Business Ethics, 140(1), 161–173. https://doi.org/10.1007/s10551-015-2661-x
Hasan, M. M., Lobo, G. J., & Qiu, B. (2021). Organizational capital, corporate tax avoidance, and firm value. Journal of Corporate Finance, 70. https://doi.org/10.1016/j.jcorpfin.2021.102050
Hegde, S., Seth, R., & Vishwanatha, S. R. (2020). Ownership concentration and stock returns: Evidence from family firms in India. Pacific Basin Finance Journal, 61. https://doi.org/10.1016/j.pacfin.2020.101330
Huang, H., Sun, L., & Zhang, J. (2017). Environmental uncertainty and tax avoidance. Advances in Taxation, 24, 83–124. https://doi.org/10.1108/S1058-749720170000024002
Islam, T., Islam, R., Pitafi, A. H., Xiaobei, L., Rehmani, M., Irfan, M., & Mubarak, M. S. (2021). The impact of corporate social responsibility on customer loyalty: The mediating role of corporate reputation, customer satisfaction, and trust. Sustainable Production and Consumption, 25, 123–135. https://doi.org/10.1016/j.spc.2020.07.019
Kim, I., Kim, J., & Kang, J. (2020). Company reputation, implied cost of capital and tax avoidance: Evidence from Korea. Sustainability (Switzerland), 12(23), 1–16. https://doi.org/10.3390/su12239997
Kim, S., Krishna, A., & Dhanesh, G. (2019). Economics or ethics? Exploring the role of CSR expectations in explaining consumers’ perceptions, motivations, and active communication behaviors about corporate misconduct. Public Relations Review, 45(1), 76–87. https://doi.org/10.1016/j.pubrev.2018.10.011
Kucuk, S. U. (2019). Consumer Brand Hate: Steam rolling whatever I see. Psychology and Marketing, 36(5), 431–443. https://doi:10.1002/mar.21175
Lepore, L., Paolone, F., Pisano, S., & Alvino, F. (2017). A cross-country comparison of the relationship between ownership concentration and firm performance: does judicial system efficiency matter? Corporate Governance (Bingley), 17(2), 321–340. https://doi.org/10.1108/CG-03-2016-0049
Manihuruk, R. S., Arieftiara, D., & Miftah, M. (2021). Tax avoidance in the Indonesian manufacturing industry. Journal of Contemporary Accounting, 3(1), 1–11. https://doi.org/10.20885/jca.vol3.iss1.art1
Marzuki, M. M., & Syukur, M. S. (2021). The effect of audit fees, audit quality and board ownership on tax aggressiveness: evidence from Thailand. Asian Review of Accounting. https://doi.org/10.1108/ARA-11-2020-0179
Matute, J., Sánchez-Torelló, J. L., & Palau-Saumell, R. (2021). The Influence of Organizations’ Tax Avoidance Practices on Consumers’ Behavior: The Role of Moral Reasoning Strategies, Political Ideology, and Brand Identification. Journal of Business Ethics, 174(2), 369–386. https://doi.org/10.1007/s10551-020-04610-5
Medioli, A., Azzali, S., & Mazza, T. (2023). High ownership concentration and income shifting in multinational groups. Management Research Review, 46(1), 82–99. https://doi.org/10.1108/MRR-02-2021-0141
Rakia, R., Kachouri, M., & Jarboui, A. (2023). The moderating effect of women directors on the relationship between corporate social responsibility and corporate tax avoidance? Evidence from Malaysia. Journal of Accounting in Emerging Economies. https://doi.org/10.1108/JAEE-01-2021-0029
Rezki, M. A., Achsani, N. A., & Sasongko, H. (2020). How does tax avoidance affect firm value? (Lessons from SOE and Indonesian private companies). Indonesian Journal of Business and Entrepreneurship. https://doi.org/10.17358/ijbe.6.3.215
Rudyanto, A., & Pirzada, K. (2020). The role of sustainability reporting in shareholder perception of tax avoidance. Social Responsibility Journal, 17(5), 669–685. https://doi.org/10.1108/SRJ-01-2020-0022
Stiglingh, M., Smit, A. R., & Smit, A. (2022). The relationship between tax transparency and tax avoidance. South African Journal of Accounting Research, 36(1), 1–21. https://doi.org/10.1080/10291954.2020.1738072
Su, K., Li, B., & Ma, C. (2019). Corporate dispersion and tax avoidance. Chinese Management Studies, 13(3), 706–732. https://doi.org/10.1108/CMS-04-2018-0497
Tax Justice Network (2023). Indonesia. Tax Justice Network. https://taxjustice.net/country-profiles/indonesia/
Wen, W., Cui, H., & Ke, Y. (2020). Directors with foreign experience and corporate tax avoidance. Journal of Corporate Finance, 62. https://doi.org/10.1016/j.jcorpfin.2020.101624
Ying, T., Wright, B., & Huang, W. (2017). Ownership structure and tax aggressiveness of Chinese listed companies. International Journal of Accounting and Information Management, 25(3), 313–332. https://doi.org/10.1108/IJAIM-07-2016-0070
Akbari, F., Salehi, M., & Bagherpour Vlashani, M. A. (2019). The relationship between tax avoidance and firm value with income smoothing: A comparison between classical and Bayesian econometric in multilevel models. International Journal of Organizational Analysis, 27(1), 125–148. https://doi.org/10.1108/IJOA-09-2017-1235
Al-Jaifi, H. A. (2017). Ownership concentration, earnings management and stock market liquidity: evidence from Malaysia. Corporate Governance (Bingley), 17(3), 490–510. https://doi.org/10.1108/CG-06-2016-0139
Alkurdi, A., & Mardini, G. H. (2020). The impact of ownership structure and the board of directors’ composition on tax avoidance strategies: empirical evidence from Jordan. Journal of Financial Reporting and Accounting, 18(4), 795–812. https://doi.org/10.1108/JFRA-01-2020-0001
AlQadasi, A., & Abidin, S. (2018). The effectiveness of internal corporate governance and audit quality: the role of ownership concentration – Malaysian evidence. Corporate Governance (Bingley), 18(2), 233–253. https://doi.org/10.1108/CG-02-2017-0043
Altaf, N., & Shah, F. A. (2018). Ownership concentration and firm performance in Indian firms: does investor protection quality matter? Journal of Indian Business Research, 10(1), 33–52. https://doi.org/10.1108/JIBR-01-2017-0009
Amidu, M., Coffie, W., & Acquah, P. (2019). Transfer pricing, earnings management and tax avoidance of firms in Ghana. Journal of Financial Crime, 26(1), 235–259. https://doi.org/10.1108/JFC-10-2017-0091
Antonetti, P., & Anesa, M. (2017). Consumer reactions to corporate tax strategies: The role of political ideology. Journal of Business Research, 74, 1–10. https://doi.org/10.1016/j.jbusres.2016.12.011
Arena, M. P., Wang, B., & Yang, R. (2021). Securities litigation and corporate tax avoidance. Journal of Corporate Finance, 66. https://doi.org/10.1016/j.jcorpfin.2019.101546
Aulivia W, C. (2023, September 19). Puluhan Perusahaan Raih Penghargaan Indonesia Original Brands & Most Reputable Companies 2023. Swa.co.id. Retrieved October 24, 2023, from https://swa.co.id/business-champions/brands/puluhan-perusahaan-raih-penghargaan-indonesia-original-brands-most-reputable-companies-2023
Boussaidi, A., & Hamed-Sidhom, M. (2021). Board’s characteristics, ownership’s nature and corporate tax aggressiveness: new evidence from the Tunisian context. EuroMed Journal of Business, 16(4), 487–511. https://doi.org/10.1108/EMJB-04-2020-0030
Cabello, O. G., Gaio, L. E., & Watrin, C. (2019). Tax avoidance in management-owned firms: evidence from Brazil. International Journal of Managerial Finance, 15(4), 580–592. https://doi.org/10.1108/IJMF-04-2018-0117
Cen, L., Maydew, E. L., Zhang, L., & Zuo, L. (2017). Customer–supplier relationships and corporate tax avoidance. Journal of Financial Economics, 123(2), 377–394. https://doi.org/10.1016/j.jfineco.2016.09.009
Chandra, C., Edward, Y. R., Sitepu, W. R. B., & Simorangkir, E. N. (2022). Pentingkah perputaran aset bagi nilai perusahaan? Jurnal Akuntansi Multiparadigma, 13(2), 367–377. http://dx.doi.org/10.21776/ub.jamal.2022.13.2.27
Chen, J., Teng, L., & Liao, Y. (2018). Counterfeit Luxuries: Does Moral Reasoning Strategy Influence Consumers’ Pursuit of Counterfeits? Journal of Business Ethics, 151(1), 249–264. https://doi.org/10.1007/s10551-016-3255-y
Chuenban, P., Sornsaruht, P., & Pimdee, P. (2021). How brand attitude, brand quality, and brand value affect Thai canned tuna consumer brand loyalty. Heliyon, 7(2). https://doi.org/10.1016/j.heliyon.2021.e06301
Dinh, T. H. T., Nguyen, C. C., & Gan, C. (2023). Ownership concentration, financial reporting quality and investment efficiency: an empirical analysis of Vietnamese listed firms. International Journal of Social Economics, 50(1), 111–127. https://doi.org/10.1108/IJSE-03-2022-0200
Fan, S., Chen, J., & Han, H. (2023). Ownership concentration and accounting information consistency—evidence from Chinese listed companies. Asian Review of Accounting, 31(1), 86–113. https://doi.org/10.1108/ARA-01-2022-0012
Fetscherin, M. (2019). The five types of brand hate: How they affect consumer behavior. Journal of Business Research, 101, 116–127. https://doi.org/10.1016/j.jbusres.2019.04.017
Foroudi, P. (2019). Influence of brand signature, brand awareness, brand attitude, brand reputation on hotel industry’s brand performance. International Journal of Hospitality Management, 76, 271–285. https://doi.org/10.1016/j.ijhm.2018.05.016
Gaaya, S., Lakhal, N., & Lakhal, F. (2017). Does family ownership reduce corporate tax avoidance? The moderating effect of audit quality. Managerial Auditing Journal, 32(7), 731–744. https://doi.org/10.1108/MAJ-02-2017-1530
Geng, Y., Liu, W., Li, K., & Chen, H. (2021). Environmental regulation and corporate tax avoidance: A quasi-natural experiment based on the eleventh Five-Year Plan in China. Energy Economics, 99. https://doi.org/10.1016/j.eneco.2021.105312
Haberstroh, K., Orth, U. R., Hoffmann, S., & Brunk, B. (2017). Consumer Response to Unethical Corporate Behavior: A Re-Examination and Extension of the Moral Decoupling Model. Journal of Business Ethics, 140(1), 161–173. https://doi.org/10.1007/s10551-015-2661-x
Hasan, M. M., Lobo, G. J., & Qiu, B. (2021). Organizational capital, corporate tax avoidance, and firm value. Journal of Corporate Finance, 70. https://doi.org/10.1016/j.jcorpfin.2021.102050
Hegde, S., Seth, R., & Vishwanatha, S. R. (2020). Ownership concentration and stock returns: Evidence from family firms in India. Pacific Basin Finance Journal, 61. https://doi.org/10.1016/j.pacfin.2020.101330
Huang, H., Sun, L., & Zhang, J. (2017). Environmental uncertainty and tax avoidance. Advances in Taxation, 24, 83–124. https://doi.org/10.1108/S1058-749720170000024002
Islam, T., Islam, R., Pitafi, A. H., Xiaobei, L., Rehmani, M., Irfan, M., & Mubarak, M. S. (2021). The impact of corporate social responsibility on customer loyalty: The mediating role of corporate reputation, customer satisfaction, and trust. Sustainable Production and Consumption, 25, 123–135. https://doi.org/10.1016/j.spc.2020.07.019
Kim, I., Kim, J., & Kang, J. (2020). Company reputation, implied cost of capital and tax avoidance: Evidence from Korea. Sustainability (Switzerland), 12(23), 1–16. https://doi.org/10.3390/su12239997
Kim, S., Krishna, A., & Dhanesh, G. (2019). Economics or ethics? Exploring the role of CSR expectations in explaining consumers’ perceptions, motivations, and active communication behaviors about corporate misconduct. Public Relations Review, 45(1), 76–87. https://doi.org/10.1016/j.pubrev.2018.10.011
Kucuk, S. U. (2019). Consumer Brand Hate: Steam rolling whatever I see. Psychology and Marketing, 36(5), 431–443. https://doi:10.1002/mar.21175
Lepore, L., Paolone, F., Pisano, S., & Alvino, F. (2017). A cross-country comparison of the relationship between ownership concentration and firm performance: does judicial system efficiency matter? Corporate Governance (Bingley), 17(2), 321–340. https://doi.org/10.1108/CG-03-2016-0049
Manihuruk, R. S., Arieftiara, D., & Miftah, M. (2021). Tax avoidance in the Indonesian manufacturing industry. Journal of Contemporary Accounting, 3(1), 1–11. https://doi.org/10.20885/jca.vol3.iss1.art1
Marzuki, M. M., & Syukur, M. S. (2021). The effect of audit fees, audit quality and board ownership on tax aggressiveness: evidence from Thailand. Asian Review of Accounting. https://doi.org/10.1108/ARA-11-2020-0179
Matute, J., Sánchez-Torelló, J. L., & Palau-Saumell, R. (2021). The Influence of Organizations’ Tax Avoidance Practices on Consumers’ Behavior: The Role of Moral Reasoning Strategies, Political Ideology, and Brand Identification. Journal of Business Ethics, 174(2), 369–386. https://doi.org/10.1007/s10551-020-04610-5
Medioli, A., Azzali, S., & Mazza, T. (2023). High ownership concentration and income shifting in multinational groups. Management Research Review, 46(1), 82–99. https://doi.org/10.1108/MRR-02-2021-0141
Rakia, R., Kachouri, M., & Jarboui, A. (2023). The moderating effect of women directors on the relationship between corporate social responsibility and corporate tax avoidance? Evidence from Malaysia. Journal of Accounting in Emerging Economies. https://doi.org/10.1108/JAEE-01-2021-0029
Rezki, M. A., Achsani, N. A., & Sasongko, H. (2020). How does tax avoidance affect firm value? (Lessons from SOE and Indonesian private companies). Indonesian Journal of Business and Entrepreneurship. https://doi.org/10.17358/ijbe.6.3.215
Rudyanto, A., & Pirzada, K. (2020). The role of sustainability reporting in shareholder perception of tax avoidance. Social Responsibility Journal, 17(5), 669–685. https://doi.org/10.1108/SRJ-01-2020-0022
Stiglingh, M., Smit, A. R., & Smit, A. (2022). The relationship between tax transparency and tax avoidance. South African Journal of Accounting Research, 36(1), 1–21. https://doi.org/10.1080/10291954.2020.1738072
Su, K., Li, B., & Ma, C. (2019). Corporate dispersion and tax avoidance. Chinese Management Studies, 13(3), 706–732. https://doi.org/10.1108/CMS-04-2018-0497
Tax Justice Network (2023). Indonesia. Tax Justice Network. https://taxjustice.net/country-profiles/indonesia/
Wen, W., Cui, H., & Ke, Y. (2020). Directors with foreign experience and corporate tax avoidance. Journal of Corporate Finance, 62. https://doi.org/10.1016/j.jcorpfin.2020.101624
Ying, T., Wright, B., & Huang, W. (2017). Ownership structure and tax aggressiveness of Chinese listed companies. International Journal of Accounting and Information Management, 25(3), 313–332. https://doi.org/10.1108/IJAIM-07-2016-0070
Published
2024-01-31
How to Cite
TJONDRO, Elisa et al.
The Influence of Brand Value on Tax Avoidance with Ownership Concentration as a Moderating Variable.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 19, n. 1, p. 171-184, jan. 2024.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/110163>. Date accessed: 04 nov. 2024.
doi: https://doi.org/10.24843/JIAB.2024.v19.i01.p11.
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