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The present paper examines whether tax avoidance practices affect productivity in small and medium-sized enterprises (SMEs). This study also analyses whether this association is moderated by firm size, firm financial constraints, management control of cash flows, or information risk.

This study used a sample of Spanish SMEs for the period 2006–2020. Tax avoidance was measured as the difference between the statutory tax rate and the effective tax rate, and three proxies for productivity were used: overall productivity, capital productivity and labour productivity. Firm fixed effects regressions, propensity score matching and change regressions were used to address the potential sample selection bias and endogeneity between tax avoidance and productivity.

The results of the empirical analysis suggest that tax avoidance increases productivity in SMEs. This beneficial effect of tax avoidance was found to be higher in small firms than in medium-sized firms, but smaller in firms that faced financial constraints. Furthermore, the findings showed that the tax avoidance effect on productivity was stronger in firms where managers had less control over the cash flow –i.e. dividend-paying firms–, and weaker in firms with lower quality of financial information – i.e. firms with qualified audit reports.

This study contributes to the research on the economic consequences of tax avoidance by examining its impact on firm-level productivity in SMEs. From additional analyses, the findings of the study suggest that the positive effect of tax avoidance on firm productivity depends on firm size, the financial slack of the firm, and the costs of agency conflicts and information problems associated with tax avoidance.

The results of this study have implications for SMEs, suggesting that cash flows obtained through tax avoidance, if properly used, may increase firm productivity. In planning their tax avoidance practices, SME managers could take advantage of specific tax incentives designed for SMEs, which is particularly relevant given the low-productivity levels of these firms. The findings also highlight the importance of maintaining high-quality information and implementing mechanisms to mitigate the agency risks associated with tax avoidance to enhance the productivity of SMEs.

This study provides important insights to policymakers on SME tax policy, supporting the special tax rules for SMEs – in force in many OECD and EU countries – which aim to create an environment conducive to SME growth. The findings of the study also have macroeconomic implications, given the importance of firm productivity as a determinant of economic growth and the relevance of SMEs in most national economies.

This study provides novel empirical evidence on the effects of tax avoidance on firm-level productivity in SMEs. Despite the prevalence of SMEs as the predominant type of organization in most countries, no prior research has comprehensively examined this issue for this type of firm. This research question was addressed by considering proxies for overall, capital, and labour productivity and by examining how SME characteristics affect this relationship.

Are franking credit balances priced? This paper aims to investigate the valuation of franking credit balances via a determinant analysis and value relevance analysis.

The determinant analysis examines the factors that contribute to the increasing cumulative level of franking credit balances. Value relevance studies explore whether franking credit balances are priced in the market.

The results provide strong evidence of a size effect that the level of franking credit balances increases with firm size and weak evidence of an international focus effect that the level of franking credit balances increases with international ownership. They also find an individual dividend clientele effect that the level of franking credit balances decreases with individual ownership. They find significant evidence that franking credit balances are priced in the market. One dollar of franking credit is worth 1.4 dollars in firm value. That franking balances are capitalized at more than their face value suggests that franking credits signal firms' future dividend policy. They also find that the market valuation of franking balances increases with firm size but decreases with international focus.

This study provides direct evidence that franking credit balances are capitalized into equity prices. In the determinant analysis, this paper improves Heaney's (2009) model by using the percentage of international ownership as the proxy of international focus, thus addressing the limitation of his measure. In the value relevance tests, the study uses a modified model that includes log-transformation to reduce the skewness of variables based on Tanza's (2014) value relevance model. Moreover, the study suggests that the market valuation of franking credit balances increases with firm size, which contradicts Heaney's (2009) findings.

This study aims to address a notable gap in the existing literature by exploring the relationship between gender diversity and dividend policy within the context of US Real Estate Investment Trusts (REITs).

The authors use a substantial data set comprising 1,398 firm-year observations across 209 US REIT companies from 2011 to 2021 to address the research aims. Fixed effects models and generalized least squares regression methods are used in the analysis.

The results demonstrate a significant positive association between board gender diversity and higher dividend payouts among US REITs. This relationship holds after controlling for corporate governance and other firm-level factors. The findings have strong implications that the presence of women on REIT boards contributes to a greater propensity for discretionary dividend increases in the USA.

This research contributes to the literature by empirically examining female directors’ role in influencing US REITs’ dividend policies, an area lacking adequate prior scholarship. The paper also considers the unique regulatory environment of REITs, highlighting the importance of the study for externally financed firms.

The study aims to examine the dividend omissions and dividend cuts behaviour of manufacturing and non-financial services firms to identify the determinants of dividend omissions and dividend cuts.

The study analyses the financial data of 3,546 firms from 2011 to 2020 (35,460 firm-year observations) using a dynamic random-effect probit panel regression model.

The results suggest that profitability, growth opportunity, leverage, liquidity, risk, extraordinary income, shareholding pattern and buyback are major determinants of dividend omissions. Similarly, dividend cut in the previous year, profitability, operating cash flow, risk and extraordinary income are major factors leading to dividend cuts.

Firms which omit the dividend are less likely to start paying dividend in subsequent years, whereas firms which cut the dividend may increase dividend in later years. Also, profitability decreases for a significant number of firms post dividend omission and cut. This indicates that dividend omission is a more prominent signal than a dividend cut for the financial health of a firm.

The determinants identified in the study enable analysts and portfolio managers to decide the propensity of dividend omission and cut even before actual announcements and can alleviate the significant loss in the portfolio. Also, managers and the board of directors would be able to monitor the firm’s financial performance to avoid the situation leading to dividend omissions and cuts.

The study strongly recommends that firms should voluntarily pay dividends to shareholders to encourage the healthy participation of retail shareholders in the equity market and create a long-term win–win situation for all stakeholders in society. If a large number of firms continue not to pay the dividend, the study appeals to the regulators to intervene to protect shareholders' interests for the greater good of society.

To the best of author’s knowledge, this is the first study to empirically identify the determinants of dividend omission and cut in the unique setting like India where dividend taxation had undergone a significant change.

This study aims to investigate the motivations behind the issuance of financial instruments with characteristics of equity (FICE), economic consequences associated with their issuance and accounting classifications based on a value-relevance approach.

Using a sample of 169 financial and nonfinancial firms from 10 jurisdictions that adopted International Financial Reporting Standards, the authors use a difference-in-differences econometric approach.

The findings reveal that FICE issuers are more leveraged companies with higher costs of equity and, in some cases, lower effective tax rates. This evidence corroborates the hypothesis that issuers of FICEs seek to increase their book values of equity (accounting treatment as equity) and, simultaneously, generate deductible expenses for tax purposes (tax treatment as liability).

This finding suggests that market participants do not treat these instruments as regular equity but rather as quasi-equity. The findings suggest that a binary classification of FICE as debt or equity may not be the accounting treatment that best represents the underlying economic substance of these contracts. Furthermore, this study reinforces the IASB indication regarding to increase the FICE disclosure to allow stakeholders to better understand the economic essence of these bonds.

This study assesses the economic outcomes and market evaluation of a specific type of FICE that has not been previously studied, which is similar to the examples provided by the IASB in their materials on the subject.

We examine how superstition shapes corporate tax avoidance and do so by taking a risk perspective and focusing on the zodiac-year belief prevalent in China.

We adopt a difference-in-differences research design to compare the degree of corporate tax avoidance in the CEOs’ zodiac year with that in the adjacent years. We do propensity-score matching to form a sample of Chinese listed firms for the regression analysis.

We find causal evidence that firms exhibit a greater magnitude of tax avoidance in the CEOs’ zodiac years, a result attributable to relatively weak tax enforcement in the Chinese context. We also find that the zodiac-year effect on corporate tax avoidance is more pronounced for firms with tight financial constraints, firms with high business risk, firms headquartered in regions with a high degree of superstition and non-state-owned firms.

This study is the first to show that superstition is a determinant factor of tax avoidance and contributes to the tax literature by shedding light on the behavioral risk factors that shape corporate tax avoidance. We take the perspective of CEOs’ risk appetite to analyze how tax avoidance is influenced by the CEOs’ trade-off between the costs and benefits of avoiding taxes. Our results suggest that, when CEOs are more risk-averse, they attach more importance to financial risk than the risk of reputational losses and litigation associated with corporate tax avoidance. The findings imply that tax avoidance can be curbed by increasing (or decreasing) the tax (financial) risk confronting the CEOs.

This paper aims to examine the effect of dividend policy on firm value for financial sector in an emerging country. Furthermore, it examines the moderating effect of IFRS adoption and the abolishment of mandatory dividend payment policy with considering the Lintner model of dividend smoothing.

Data were collected from 111 firms listed on Borsa Istanbul in the financial sector in Turkey over 1995–2017. Using an explanatory research design, this study performs various multivariate regression techniques to investigate the proposed relationships.

The outcomes demonstrate a positive and significant association between dividend policy and firm value. In addition, the relationship has strengthened after IFRS adoption, indicating that accounting information such as dividend-based ratios prepared under IFRS is more value relevant. The empirical outcomes supported the Lintner model, which is persistent with the signalling hypothesis. Moreover, the findings state that the abolishment of mandatory dividend payment in 2009 strengthened the association between dividend policy and firm value for financial institutions in Turkey.

These results provide an insight to the investors and managers that the effect of IFRS adoption and other policy changes could be greater on the association between dividend policy and firm value. The study empirically tests Lintner model of dividend smoothing for financial firms in an emerging economy.

This study contributes to the literature through providing vital insights on the relationship between dividend policy and firm value and empirically revisiting the Lintner model for financial sector in a developing economy, specifically Turkey. Furthermore, it addresses the influence of IFRS implementation on the association between dividend policy and firm value. These findings are robust to alternative sampling methods and to controlling for other factors which influence firm value.

Some researchers regard discretionary accrual (DA) as one of the factors that drive corporate managers to conduct tax planning (Scott, 2009; Basri and Buchari, 2017). Based on agency theory and positive accounting theory, corporate managers can transform accounting information and manipulate firm earnings to reduce tax liability. There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of real earnings management (REM) on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning. Despite the widespread notion, as well as positive accounting theory, tax planning theory that financial attributes (profitability, leverage, liquidity and firm growth), REM and DA motivate tax planning, previous investigations have produced mixed results (Dwenger and Steiner, 2009; Wang and Chen, 2012; Chen and Zolotoy, 2014; Aghouei and Moradi, 2015; Pettersson and Wu, 2015; Ribeiro, 2015; Chen et al., 2016; Jamei and Khedri, 2016; Ogbeide, 2017; Yuniawati et al., 2017; Chen and Lin, 2017; Firmansyah and Febriyanto, 2018; Prastiwi, 2018; Rani et al., 2018; Kibiya and Aminu, 2019; Kałdoński and Jewartowski, 2019 and Siyanbonla, 2021). This study aims to use REM as a moderator to examine the relationship between financial attributes and tax planning whether it will strengthen or weaken the relationship.

The study examines the impact of financial attributes on the corporate tax planning of listed manufacturing firms in Nigeria. It also tests for the moderating effect of REM on the relationship between financial attributes and tax planning. Data for the study was sourced from the annual reports of sampled manufacturing firms. The study used the panel data methodology for analysis. The study used fixed effect estimation to interpret the parsimonious model and random effect was used to interpret the moderated model. The study documented that financial leverage has a positive significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other. The study recommends that firms should go for more debt to take advantage of the tax shield of interest on the debt. Also, firm management should use non-current debt to finance non-current assets and use current debt to finance current assets to avoid the risk of taking over or liquidation. The study also recommends that firm management should engage in intercompany and intracompany transactions by selling their goods to affiliates in countries with low prices and low tax rates. A firm should also overproduce goods to have high production costs and high closing inventory since real earning management significantly reduces tax liabilities by deferring income into a later year.

The study documented that financial leverage has a positive and significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative but significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive and significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other.

There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of REM on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning.

This study aims to examine how environmental, social and governance (ESG) performance influences stock price volatility, with a specific focus on the moderating role of tax engagement.

ESG performance is measured by an ESG score calculated from the weighting of three dimensions: environmental, social and governance. Stock price volatility is measured by the degree of stock price variations over 12 months, based on the last 52 weeks’ prices. A sample of French-listed firms in the SBF120 is used, with 770 observations extracted from the 2012–2022 period. The feasible generalized least squares approach is used to eliminate endogeneity and multicollinearity problems.

The results show that the ESG score negatively impacts stock price volatility, with this impact being more significant in the social dimension than in the environmental and governance dimensions. In addition, the tax payment variable moderates the relationship and increases the effect of the ESG score on stock price volatility. These findings suggest that ESG practices and tax transparency are not only ethical elements but also key components for financial stability, promoting the high-quality development of listed firms.

This study is significant for firms, regulators, policymakers and investors. Overall, it underscores the importance of firms adopting ESG activities and engaging in tax management to mitigate risks and maintain viability in the contemporary business environment.

This study provides new empirical evidence regarding the factors driving corporate stock price volatility. In addition, it offers pertinent policy recommendations for businesses and governments regarding the significance of ESG investments.

“The latest available cross-country data presented in the PEPPER V Report (Lowitzsch and Hashi, 2024) can be viewed by examining EFP in and of itself as an isolated subject or it can be viewed in a much wider set of contexts. Widening the lens in order to examine EFP in the context of the concentration of capital ownership and the concentration of capital income can help observers establish EFP’s span of relevance. In particular US data on capital income show that policy makers need to be aware that EFP can have an important role in narrowing the income and wealth gap for the working middle class when the concentration of capital ownership and capital income is high and when real wage growth is low.”

“Against this background, this article makes a very straightforward observation that the relevance of EFP in an economic system, in a country, and for the average employee in a country is related to the trend in the concentration of capital ownership and capital income. Interest in the idea is potentially increased or decreased by trends in real wages. Atkinson, who many consider the founder of modern wealth concentration scholarship, “focuses on the increasing share of capital incomes a source of income inequality among individuals” (Cirillo et al., 2017, p. 1). Indeed, we consider the difference between labour’s share and capital’s share to be a critically important fundamental problem of political economy. This essay asserts that when this concentration is high and real wages are flat, other things being equal, EFP may be more relevant. When the concentration of capital ownership and capital income is high, this means that ownership and income on that ownership is thinly spread in the population. When real wages are flat, this means that the rate at which fixed wages can replenish wealth is decreasing. As a result, both trends would make EFP more relevant.”

The conceptual model suggested for this article asserts that the relevance of EFP can be viewed as a function of narrowing income and wealth options for the working middle class when the concentration of capital ownership and capital income is high and when real wage growth is low. Does this relevance change across economic systems? There is no question that the future understanding of these issues requires adding metrics to the statistical methodologies of different regions and countries and adding to existing reports and analyses that focus on both the dynamics of and trends in capital income (property income in the EU) and on the EUR and USD value of EFP at the mean and at the median for different income levels of the population

This article presents – for the first time – a society-wide measure of the impact of EFP on one economy, namely, the US For further research, it makes sense to build on the comparable data available on the distribution of capital ownership and have similar research on the distribution of capital income for both the EU and the US along with measures of the EUR and USD values of EFP.