Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance?
Purposes: This study examines the role of institutional ownership in moderating the effect of transfer pricing and sales growth on corporate tax avoidance of companies in Indonesia's food and beverage sub-sector manufacturing sector. Method: This study selected samples purposively, which resu...
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| Language: | English |
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Universitas Negeri Semarang
2024-09-01
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| Series: | Jurnal Dinamika Akuntansi |
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| Online Access: | https://journal.unnes.ac.id/journals/jda/article/view/5697 |
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| author | Euis Nessia Fitri Dani Rahman Hakim |
| author_facet | Euis Nessia Fitri Dani Rahman Hakim |
| author_sort | Euis Nessia Fitri |
| collection | DOAJ |
| description | Purposes: This study examines the role of institutional ownership in moderating the effect of transfer pricing and sales growth on corporate tax avoidance of companies in Indonesia's food and beverage sub-sector manufacturing sector.
Method: This study selected samples purposively, which resulted in 12 sample companies. We observed the financial reports from each company twice a year from 2015 to 2022, so the total panel data in this study was 192 (12 x 16). Then, this study employs a random effect estimator within a moderation model framework to analyze those data.
Findings: This study found that sales growth and institutional ownership increase corporate tax avoidance. However, transfer pricing does not affect corporate tax avoidance. This study uncovers the double-edged sword role of institutional ownership in corporate tax avoidance practices. On the one hand, institutional ownership reduces the effect of transfer pricing on corporate tax avoidance. On the other hand, a company's high institutional ownership could exacerbate corporate tax avoidance caused by increased sales growth. It means that the institutional investor's primary orientation is dividend profits rather than increasing reputation and company value. It urges policymakers to increase the awareness of institutional investors and company managers in the context of corporate tax compliance.
Novelty: As far as we know, our study was the first to employ institutional ownership as a moderator variable in the relationship between transfer pricing and sales growth on corporate tax avoidance. |
| format | Article |
| id | doaj-art-dc6a4b6ca90141e59f40eec3af065fe8 |
| institution | DOAJ |
| issn | 2085-4277 |
| language | English |
| publishDate | 2024-09-01 |
| publisher | Universitas Negeri Semarang |
| record_format | Article |
| series | Jurnal Dinamika Akuntansi |
| spelling | doaj-art-dc6a4b6ca90141e59f40eec3af065fe82025-08-20T03:23:56ZengUniversitas Negeri SemarangJurnal Dinamika Akuntansi2085-42772024-09-0116211413210.15294/jda.v16i2.56975702Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance?Euis Nessia Fitri0Dani Rahman Hakim1Universitas PamulangUniversitas PamulangPurposes: This study examines the role of institutional ownership in moderating the effect of transfer pricing and sales growth on corporate tax avoidance of companies in Indonesia's food and beverage sub-sector manufacturing sector. Method: This study selected samples purposively, which resulted in 12 sample companies. We observed the financial reports from each company twice a year from 2015 to 2022, so the total panel data in this study was 192 (12 x 16). Then, this study employs a random effect estimator within a moderation model framework to analyze those data. Findings: This study found that sales growth and institutional ownership increase corporate tax avoidance. However, transfer pricing does not affect corporate tax avoidance. This study uncovers the double-edged sword role of institutional ownership in corporate tax avoidance practices. On the one hand, institutional ownership reduces the effect of transfer pricing on corporate tax avoidance. On the other hand, a company's high institutional ownership could exacerbate corporate tax avoidance caused by increased sales growth. It means that the institutional investor's primary orientation is dividend profits rather than increasing reputation and company value. It urges policymakers to increase the awareness of institutional investors and company managers in the context of corporate tax compliance. Novelty: As far as we know, our study was the first to employ institutional ownership as a moderator variable in the relationship between transfer pricing and sales growth on corporate tax avoidance.https://journal.unnes.ac.id/journals/jda/article/view/5697institutional ownershipsales growthtax avoidancetransfer pricing |
| spellingShingle | Euis Nessia Fitri Dani Rahman Hakim Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance? Jurnal Dinamika Akuntansi institutional ownership sales growth tax avoidance transfer pricing |
| title | Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance? |
| title_full | Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance? |
| title_fullStr | Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance? |
| title_full_unstemmed | Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance? |
| title_short | Does Institutional Ownership Moderate the Effect of Transfer Pricing and Sales Growth on Tax Avoidance? |
| title_sort | does institutional ownership moderate the effect of transfer pricing and sales growth on tax avoidance |
| topic | institutional ownership sales growth tax avoidance transfer pricing |
| url | https://journal.unnes.ac.id/journals/jda/article/view/5697 |
| work_keys_str_mv | AT euisnessiafitri doesinstitutionalownershipmoderatetheeffectoftransferpricingandsalesgrowthontaxavoidance AT danirahmanhakim doesinstitutionalownershipmoderatetheeffectoftransferpricingandsalesgrowthontaxavoidance |