How do financial constraints affect the relationship between corporate tax avoidance and firm investment? Evidence from Thai listed firms
Keywords:
corporate tax avoidance, financial constraints, investment, ThailandAbstract
This study examined the relationship between corporate tax avoidance and firm investment by using 2,555 firm-year observations of listed firms during 2008–2017. The empirical results revealed that firms with increasing investment levels are less likely to engage in tax avoidance activity. This study further performed an analysis of the differences between financially constrained firms and nonfinancially constrained firms, which affect the relationship between corporate tax avoidance and firm investment. The results found that both firms with high and low financial constraints have negative relationship between tax avoidance and investment levels. The conclusion is that both firms with high and low financial constraints will not find additional internal resources for investment through tax avoidance.
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This is an open access article under the CC BY-NC-ND license http://creativecommons.org/licenses/by-nc-nd/4.0/