The Association Between Tax Avoidance and Corporate Governance: An Empirical Analysis
Özet
This empirical study by Ahmet Özcan examines the relationship between corporate governance mechanisms and tax avoidance strategies among non-financial firms in an emerging market setting. Utilizing a sample of 72 companies listed on Borsa Istanbul over the period from 2017 to 2021, the author constructs a random-effects panel regression model to evaluate how specific corporate governance and firm-level variables impact the Effective Tax Rate (ETR). The empirical results reveal that board size and financial leverage exert a statistically significant positive effect on ETR, indicating that firms with larger boards and higher debt levels are less likely to adopt aggressive tax avoidance practices. Conversely, audit firm type and firm size display a statistically significant negative relationship with ETR, demonstrating that larger corporations and those audited by Big-4 accounting firms engage more extensively in tax avoidance due to superior resources and tax expertise. In contrast, institutional ownership, board independence, CEO duality, and return on equity show no statistically significant association with tax avoidance policies. Ultimately, these findings highlight the critical role of firm-specific characteristics and internal governance structures in shaping corporate tax planning, offering valuable practical implications for firm managers, market investors, and regulatory policymakers operating in developing economies.
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