Access to finance and corporate tax avoidance: International evidence

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2024-12-07 DOI:10.1016/j.intaccaudtax.2024.100668

Ramzi Benkraiem , Safa Gaaya , Faten Lakhal , Merve Kilic

引用次数: 0

Abstract

This paper investigates the relationship between access to finance and corporate tax avoidance. Using a sample of 63,443 firm-year observations from 37 countries, the results reveal that firms suffering from limited access to finance are more inclined to engage in tax avoidance practices. This result supports the pecking-order theory and suggests that managers may rely on cash flows generated from tax-saving activities to finance their investments. The results also show that increased levels of financial constraints are positively associated with tax avoidance in the presence of high economic policy uncertainty (EPU). We also show that this effect is more prevalent in firms operating in countries with high government debt levels, and with weak investor protection. Our results are robust after addressing endogeneity concerns and using different measures of financial constraints, tax avoidance, and additional control variables.

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.