Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/146984
Title: DO INVESTORS VALUE TAX AVOIDANCE IN SINGAPORE-LISTED FIRMS?
Authors: LIM SI MIN SALLY
Keywords: Corporate tax avoidance, corporate governance, firm valuation
Issue Date: 9-Apr-2018
Citation: LIM SI MIN SALLY (2018-04-09). DO INVESTORS VALUE TAX AVOIDANCE IN SINGAPORE-LISTED FIRMS?. ScholarBank@NUS Repository.
Abstract: This paper examines whether investors value corporate tax avoidance in Singapore. Using a broad sample of Singapore-listed firms over the period of 2007 to 2016, I find that investors do positively value corporate tax avoidance. On average, one percentage point increase in corporate tax avoidance is associated with 0.40% increase in firm value. I also find that governance is negatively associated with corporate tax avoidance. Compared to a firm with median governance quality, a firm at the 25th percentile has a higher level of corporate tax avoidance by 2.99%. On further analysis using subsamples of governance tertiles, I provide some evidence that investors may question the value of tax avoidance in the absence of good governance. Only the top governance tertile exhibits significant positive valuation of tax avoidance. The direct benefit of tax avoidance (higher after-tax profits) is potentially offset by the increased opportunities for managerial rent diversion in the poorly-governed firms.
URI: http://scholarbank.nus.edu.sg/handle/10635/146984
Appears in Collections:Bachelor's Theses (Restricted)

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