Does tax aggressiveness and cost of debt affect firm performance? The moderating role of political connections

Abdullah,; Hashmi, Muhammad Arsalan; Mateen, Abdul; Badshah, Yousuf Ali; Iqbal, Muhammad Sikander

doi:10.1080/23322039.2022.2132645

Cited by 4 publications

(5 citation statements)

References 82 publications

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“…The results of this study are in line with the research of Fajaryani Syriac (Fajaryani & Suryani, 2018). This confirms that a company's financial performance increases as its size increases (Damanik et al, 2022;Nahdhiyah & Alliyah, 2023;Sihono & Khairiyahtussolihah, 2022).…”

Section: Effect Of Company Size Financial Performancesupporting

confidence: 87%

“…Many studies raise similar topics related to financial performance, but many results still show differences from one researcher to another. This causes inconsistencies in the results of the study (Karnoto et al, 2023;Mujiyati et al, 2021;Sihono & Khairiyahtussolihah, 2022). Based on this foundation, the researchers expanded on this study update to include factors related to financial structure and company size.…”

Section: Introductionmentioning

confidence: 99%

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The Effect of Environment Performance, Capital Structure, and Company Size on Financial Performance

Alfitri,

Nugroho,

Nurcahyono

2022

MAKSIMUM

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One way to assess a company's success is to look at its financial results. Due to the COVID-19 pandemic, the financial performance of the industrial sector plummeted. When a company's financial performance plummets, there is no choice but to declare bankruptcy. Based on data collected from the Indonesia Stock Exchange (IDX) manufacturing business between 2018 and 2021, this study will analyze the relationship between environmental performance, capital structure, company size and financial success. This study uses quantitative methods based on cross-sections of 25 financial statements covering 2018–2021. A combination of descriptive statistics and multiple regression was used in this study. The statistical program SPSS 24 was used for this study. According to research, a company's size, capital structure, and environmental performance all play a role in its financial success. Discussing financial performance is a common theme in many studies. For the latest version of the study, researchers included variables such as capital structure, company size, and period

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Section: Effect Of Company Size Financial Performancesupporting

confidence: 87%

Section: Introductionmentioning

confidence: 99%

The Effect of Environment Performance, Capital Structure, and Company Size on Financial Performance

Alfitri,

Nugroho,

Nurcahyono

2022

MAKSIMUM

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“…Based on nonfinancial listed firm in the UAE (United Arab Emirates) stock market, Hassan et al (2022) show that political connection enhances business performance. Abdullah et al (2022) state that tax-aggressive firms in Pakistan have politically connected board members and this fact improves their performance.…”

Section: Pc-isbs and Firm Performancementioning

confidence: 99%

Politically connected independent supervisory boards and corporate performance during COVID‐19: Evidence from Indonesia

Dharmawan,

Joni,

Setyawan

2024

Journal of Public Affairs

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This study aims to examine the relationship between the political connections of companies' independent supervisory boards (PC‐ISB) to these firms' performance during the COVID‐19 pandemic in Indonesia. This study used 1515 observations of companies listed on the Indonesian Stock Exchange (IDX) for the years 2018–2021. The test was carried out using moderated regression analysis. Additional tests were also conducted, such as market performance tests and endogeneity tests using the System Generalized Method of Moments (the System GMM) and the difference‐in‐difference (DID) regression analysis. Results confirm that PC‐ISB has a significant positive effect on company performance. Then, during the COVID‐19 pandemic, the company's performance got worse. However, we did not find that pandemic conditions moderated the relationship between PC‐ISB and company performance. Our results remained consistent after testing using the System GMM and the DID to address the issue of endogeneity.

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“…Tax aggressiveness causes an increase in agency problems within companies and a decrease in the quality of financial reporting (Abdullah et al, 2022;Christensen et al, 2016). Previous studies revealed tax aggressive action taken by the companies that have a risk to reputation, namely increase supervision by regulators and legal action from stakeholders (Cook et al, 2017).…”

Section: Political Connection Tax Aggressiveness and Audit Qualitymentioning

confidence: 99%

Moderating effect of audit quality: the case of political connection, executive compensation and tax aggressiveness

Sihono,

Munandar

2023

JEM

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The study examines the moderating effect of audit quality on relationship between political connection, executive compensation on tax aggressive. The secondary data used for this study in the form of financial statements of 56 financial sector firms listed on Indonesian stock exchange from 2018 to 2021. Moderated Regression Analysis used for analyzed data. Result indicate, that political connection positively affected tax aggressive. These result support the view of grabbing hand theory, where a bureaucrat who occupies a position in the company will be controlled by the corporation because they get welfare. Furthermore, we find that executive compensation negatively affected tax aggressive. The result of moderation analysis show that audit quality can weaken the relationship of executive compensation on tax aggressive. These findings of this research suggest that audit quality is an effective corporate governance mechanism, thereby protecting users against the opportunism and fraud by managers. This show that corporate governance is able to mitigating information asymmetry that exist in the relation between agent and principals.

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Does tax aggressiveness and cost of debt affect firm performance? The moderating role of political connections

Cited by 4 publications

References 82 publications

The Effect of Environment Performance, Capital Structure, and Company Size on Financial Performance

The Effect of Environment Performance, Capital Structure, and Company Size on Financial Performance

Politically connected independent supervisory boards and corporate performance during COVID‐19: Evidence from Indonesia

Moderating effect of audit quality: the case of political connection, executive compensation and tax aggressiveness

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