An Investigation of the Firm Size—Effective Tax Rate Relation in the 1980s

Abstract

Given the recent emphasis on effective tax rates by policy makers and accounting researchers, this study investigates the relation between firm size and corporate tax burdens on a yearly and an industry basis. The analysis is conducted using five effective tax measures employed in previous studies in order to determine the degree to which inferences between size and tax burden are robust across these different effective tax measures. The results indicate that the relation is fairly robust across measures and, in instances in which the relation is not upheld by our analysis, sample composition explains differences in the observed relation between firm size and corporate tax burden.

The board of directors and the corporate tax planning: Empirical Evidence from Tunisia

“…In fact, the tax burdens change from one sector to another. The relation between the effective tax rates and the industrial sectorial effects was explored in some studies (Gupta and Newberry 1997;Kern and Morris, 1992;McIntyre and Nguyen, 2000;Omer andZimmerman (1983) but it often is treated as a subsidiary question and an adjustment factor. Stickney and McGee (1982) conclude that the sectors related to the natural resources are treated in favorable manner than the other sectors.…”

“…Stickney and McGee (1982) conclude that the sectors related to the natural resources are treated in favorable manner than the other sectors. Omer & al., (1993), Gupta and Newberry (1997), Nicodème (2002), Derashid and Zhang (2003), Janssen and al. (2005) and Vandenbussche and al.…”

Determinants of the effective tax rate in the tourism sector: a dynamic panel data model

“…There are studies showing a positive relationship between size and tax burden, among which we can mention those by Calvé et al (2005), Derashid and Zhang (2003), Fonseca et al (2011), Kim and Limpaphayom (1998), Omer et al (1993), Plesko (2003), Richardson and Lanis (2007) and Zimmerman (1983), which would confirm the hypothesis of political costs. However, other authors, such as Chen et al (2010), Harris and Feeny (2003), Heshmati, Johansson, and Bjuggren (2010), Mills, Erickson and Maydew (1998), Monterrey and Sánchez (2010), Porcano (1986), Tran (1997Tran ( , 1998 and Wang (1991) show the existence of a negative relationship, i.e.…”

“…The objectives sought by research on the ETR have namely been: (1) To study the consequences of modifications to national tax law on the ETR (Calvé, Labatut and Molina, 2005;Fernández, 2004;Fernández, Martínez and Álvarez, 2004;Garrido and Garrido, 2006;Gravelle, 1982;Guenther, 1994;Gupta and Newberry, 1992;Manzon and Smith, 1994;Martinez, Fernández and Álvarez, 2001;Scholes and Wolfson, 1992;Shevlin and Porter, 1992); (2) To perform a comparative analysis of different countries (Buijink Janssen and Schols, 2002;Collins and Shackelford, 1995;Devereux and Griffith, 1998;Fernández and Rubín, 2002;Fernández, Martínez and Álvarez, 2008;Jacobs and Spengel, 2000;Kim and Limpaphayom, 1998;Molloy, 1998);and (3) To research the factors that determine tax burden (Adhikari et al, 2006;Chen, Chen, Chen and Shevlin, 2010;Feeny, Gillmann and Harris, 2006;Fernández, 2004;Fernández andMartínez, 2009 andFonseca et al, 2011;Graham, 1996;Gupta and Newberry, 1997;Holland, 1998;Kern and Morris, 1992;Molina, 2012;Monterrey and Sánchez, 2010;Omer, Molloy and Ziebart, 1993;Porcano, 1986;Richardson and Lanis, 2007;Stickney and McGee, 1982;Wang, 19...…”

“…The sector of activity of the company is a frequently used variable in these studies (Derashid and Zhang, 2003;Gupta and Newberry, 1992;Omer et al (1993), Porcano, 1986;Zimmerman, 1983) since it may play a significant role, taking into account the tendency of legislators to establish differentiated tax treatments for certain sectors or for certain types of activities that may be more usual for some activities than for others (Molina, 2005, p. 108). …”