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The purpose of this study is to examine the interactive impact of tax avoidance and tax risk on the firm value.

This study covers 290 observations on non-financial corporations listed on the Tunisian Stock Exchange for the period ranging from 2008 to 2020, using the multiple linear regression technique.

The results show that tax avoidance positively affects the firm value while tax risk has a negative influence on the company value. More importantly, tax risk moderates the positive impact of tax avoidance on the firm value. Accordingly, tax avoidance must be considered in conjunction with tax risk when studying the effect on the firm value. The findings of additional analyses indicate that when tax avoidance is associated with a high level of tax risk, it negatively affects the firm value. Thus, investors negatively rate the high-risk tax avoidance.

The major limitation of this study is that it focuses only on Tunisian listed companies since their financial statements are publicly available. Although the sample is relatively small due to the problem of data availability, it is satisfactory owing to the twelve-year sampling period (from 2008 to 2020). Research implications- The results obtained are of great interest to researchers as they should be more careful in simply using effective tax rates as a measure of risky or aggressive tax avoidance.

The findings may signal the need for Tunisian firm managers to consider spillovers when adopting risky tax avoidance strategies and to implement a tax risk management policy within the firm. They are also substantial for Tunisian regulators to create requirements for reporting risky tax avoidance practices in the company annual reports to protect the investors’ rights and the society interest in general. The results are also useful for the investors who would like to make good decisions with respect to tax planning strategies. It is not enough to rely on the Effective Tax Rate (ETR) to judge whether or not tax planning is risky. Volatile ETRs, as a proxy of the tax risk, can be useful for them in decision-making.

The results also highlight that risky tax avoidance decreases the firm value, and thus confirm the negative repercussions that such behavior can have not only on the firm, but also on the society in general, as the corporate tax contributes to covering the State public expenditure. Hence, it is considered a general concern.

The present study differs from others in the existing literature. In fact, it examines the joint effect of tax avoidance and tax risk on the firm value for Tunisian listed companies which are characterized by the predominance of agency conflicts between major shareholders and minor ones. Therefore, the authors seek to investigate if small shareholders can penalize risky tax avoidance practices by decreasing the firm value.

This study aims to investigate, on the one hand, the impact of the Tunisian Revolution and internal governance mechanisms (especially, the ownership structure and the board of directors structure on the extent of voluntary information disclosure [VID]) and on the other hand, the moderating effect of the Tunisian Revolution on the relationship between the internal corporate governance mechanisms and the VID.

A content analysis of 362 annual reports is used for determining the level of VID. This study covers a 10-year period (2007-2016) which is divided into two sub-periods (before and after the Tunisian Revolution). The generalized least squares regression model was used to investigate the effect of the Tunisian Revolution, ownership structure and the board of directors structure on the VID.

The Tunisian companies disclose less voluntary information after the Tunisian Revolution because of a decrease in the disclosure of information related to results, intangible assets, non-financial information and management’s discussion and analysis. The authors’ findings highlight the importance of the moderating effect of the revolution. After the Tunisian Revolution, a positive relationship was found, on the one hand, between institutional ownership, board size and board independence, and the VID on the other hand. Besides, companies with dual structures and with a high level of foreign ownership are less reluctant to the VID. Moreover, different governance mechanisms are related to different types of information disclosed. These relationships were affected by the Tunisian Revolution.

This piece of research could be useful for managers, investors and different stakeholders. It can help managers in improving their VID and thus their companies’ transparency, mainly in developing countries and in times of crisis. Moreover, it could be helpful for investors and stakeholders for their decision-making, especially in crisis periods.

This study contributes to the literature by investigating the VID in a developing country and in times of crisis. It widens knowledge by analyzing the types of voluntary information disclosed. It is one of the few pieces of research investigating this issue. Moreover, it is the first research analyzing the consequences on the VID of the revolutions in the Arab countries that have experienced an Arab Spring Revolution.

The purpose of this paper is to investigate the potential influence of internal and external corporate governance mechanisms on audit risk in Tunisian companies.

Based on a sample of Tunisian non-financial firms listed on the Tunisian Stock Exchange (TSE) over the periods 2005 to 2010 (pre- 2011 revolution) and 2011 to 2017 (post −2011 revolution), consisting of 371 observations for the whole period, the authors apply the generalized least square (GLS) to test the research hypotheses and model.

The results are consistent with the agency theory suggesting that efficient corporate governance is able to control and reduce a company’s agency problem. Evidence reveals that the effectiveness of the director’s board/ownership structure and audit quality have the most influence on audit risk before than after the 2011 revolution, although governance mechanisms should play a more active role in encouraging companies to be more transparent in the post-revolution period. Moreover these findings are confirmed when identifying a composite measure of corporate governance.

Significant implications are provided for analysts, investors, regulators and academics. First, findings can help Tunisian regulators determine corporate governance disclosure requirements. Second, this research will make investors and stakeholders aware of the fact that minimizing auditor risk will be effective in reducing agency problems in emerging markets like Tunisia. Then, this work can help researchers better understand and realize the corporate governance role in the quality of audit process and financial statements and encourage them to deeply and broadly investigate this issue on other emerging markets.

This study stands for an extension of the existing research on corporate governance and audit risk. It fills a research gap in the local context. In fact, the considered data are those of the pre- and post-revolution Tunisian market, mainly in periods of instability. Although emerging markets make up the vast majority of economic activity around the world, they have received limited attention in academic research.

The objective of this paper is to study the impact of political connection and governance on credit rating and whether there is a substitution or complementary relationship between them.

In order to achieve the objective, a succession of eight ordered probit regressions has been carried out. Moderating variables between the political connection and governance characteristics were introduced. The whole population is taken as a sample, i.e., 27 Tunisian companies that are evaluated by FITSH NORTH AFRICA agencies over a period of 10 years (2009–2018).

The outcomes are mixed. They show that the political connection does not always influence credit rating; the size and board independence always improves credit rating; the duality between the functions affects credit rating; whereas the majorities’ proportion does not influence credit rating; and a substitution between the political connection and the governance characteristics is validated.

Like any other research, our results are factors of our measures and variable choice and depends heavily on the how these variables were conceived. Also, although our number of observations responds to the statistical result generalization requirements, our sample remains relatively narrow with 27 companies only.

In practice, the research will allow investors to have a better vision upon the future of their investments based on whether to develop their governance system or promote political networking. It will also prompt lenders to look beyond ratings and consider factors such as political connections to make a rational judgment on their future placements.

This study leads us to find various solutions: the establishment of credit agencies that take into consideration all the data of all the operators taken as a whole (bank, leasing company, and factoring). It encourages the reorganization of the Tunisian banking sector through mergers for example.

This study is a pioneer in the credit rating field in Tunisia, where the source of debt financing is the most used by all enterprises across all sectors. This study extends the literature of political connection effectiveness, independent directors, board size, in improving corporate performance and credit rating.

This study aims to investigate the extent and trends of voluntary corporate social responsibility (CSR) disclosure and to analyze the determinants of the listed banks’ annual reports and websites in an emergent capital market, namely, Tunisia.

The authors examine the level of CSR disclosure by means of a manual content analysis where the sentence is used as the unit of the analysis. They use Branco and Rodrigues’ (2006 and 2008) index which includes 23 items. They focus on the annual reports of 11 Tunisian listed banks during the period from 2007 to 2012 and the information presented on their websites in December 2013. They use, also, regression analysis to identify the determinants of CSR disclosure used by Tunisian listed banks.

The results of the investigation show that Tunisian listed banks disclose CSR information primarily in a narrative form. Human resources are the main focus in the annual reports, whereas, on the websites, community involvement is the most widespread theme. With regard to the determinants, it appears that bank age, financial performance and state shareholding are the main factors that impact CSR disclosure in the Tunisian listed banks’ annual reports. Furthermore, this study finds a positive (negative) relationship between leverage (financial performance) and CSR disclosure in the banks’ websites. In this regard, the results show different determinants of CSR disclosure for the two supports. Moreover, bank size, foreign shareholding and the type of auditor are unrelated to the listed banks’ CSR disclosure either in their annual reports or on their websites.

The sample size is small; however, it consists of all the relevant Tunisian banks. Also, this study is subject to the limitations of using manual content analysis.

This study enables highlights the importance of CSR disclosure and its determinants for the Tunisian banks’ stakeholders (such as regulators, investors and managers).

The authors contribute to the scarce literature on CSR disclosure in financial institutions. It is the first study to investigate Tunisian listed banks’ CSR disclosure. It is a first attempt to show, also, how banks’ characteristics and banks’ ownership structures impact on their CSR disclosure in their annual reports and on their websites.

The purpose of this paper is to examine the effect of the presence of political connections on firm performance through related party transactions in Tunisia, a country where that is characterized by the Jasmin revolution in 2011.

The study uses a sample of nonfinancial firms between 2008 and 2014 listed on the Tunis Stock Exchange and uses generalized least squares on panel data.

First, the political connection and related parties' transaction enhances firm's market performance. Second, the study reveals that political connection moderates the relationship between the related party transactions and firm performance only in the period after revolution. Indeed, politicians seem to have used related party transactions to expropriate firms in a period of political instability. Finally, we show that politicians are more attracted by firms with higher market performance and with higher number of related parties' transactions.

The empirical findings contribute to the current debate on the benefits and costs of political connections in emerging economies. It shows that political connections enhance market valuation of firms. However, political connection costs appear during political instability period.

This study addresses the interaction between related party transactions, political connections and firm performance. It is the first study to test if the related party transactions are used as a tool by politicians to expropriate firms.

The purpose of this study tests whether political instability influence financial decision-making behavior of Tunisian-listed firms, in particular dividend payout policy.

This paper uses dividend payout decisions announced over the period 2008–2015 by nonfinancial firms listed on the Tunisian Stock Exchange. A logistic regression is applied to analyze the relationship between political instability and dividend payout decision “changes. These latter are: past non-payers” dividend initiation, past payers' dividend termination, dividend payout “increasing and dividend payout” decreasing. Political instability variables used are as follows: number of changes in government head and dummy variables indicating the changes of ruling party and election year.

This study shows that government head changes are positively related to dividend initiation decisions while changes in ruling party are negatively related to termination dividend decisions except for family controlled ones. These firms are more likely to stop dividend on period of ruling party changes. Moreover, firms become unwilling to increase dividend payment on the period of political instability (changes in ruling party and government head and elections) and become willing to decrease dividend payment only when the government head changes.

The empirical findings contribute to the current debate on the signaling power of dividend policy in emerging market where raising equity capital is difficult and controlling shareholders prefer reinvest benefit to pay dividends. In addition, this study has important implications for regulators and governments struggling to design policies to improve investors' confidence and boost market activity. Indeed, investors may use corporate payout as a signal for better governance.

To the author' best knowledge, this paper is the first to investigate and to compare the effect of three political instability sources; government head changes, changes in ruling party and elections, on dividend payout decision changes. This paper provides evidence that firms facing political unstable environment seek to achieve two goals when they make dividend policy: reducing financial distress probability and attracting minority owners.

This article examines the link between the structure of the board of directors and target price accuracy using a sample of 51 listed firms on the Tunisian Stock Exchange over the period of 2011–2017.

In this study, the authors used the generalised method of moments (GMM) model to control the endogeneity problem.

As a result, that model can serve as a signal in the forecasting process. The authors' results suggest that target price accuracy is negatively related to board independence, and dual Chief Executive officer (CEO). In addition, CEO compensation tends to exert a negative impact on target price error.

The authors' findings are valuable for common investors because the findings can be useful in enhancing their capital allocation decisions by assigning higher weights to forecasts issued by firms with strong corporate governance systems. The authors' study also has practical implications for managers and policymakers. Specifically, the evidence provided herein suggests that firms with strong corporate governance mechanisms enhance the accuracy of market expectations, alleviate information asymmetry, and limit market surprises, especially in a context characterised by weak investor protection. The authors' results highlight the advantages of strong corporate governance in improving a firm's information environment and, therefore, are useful for the cost–benefit analysis of improving internal governance mechanisms. Additionally, the authors' results may prove useful to investors who can rely on the information provided by analysts for well-governed companies.

The authors' study contributes to the literature in both corporate governance and analysts' forecasts fields. The study provides additional evidence of the benefit of board quality attributes on target price accuracy in an emerging market characterised by high information asymmetry and weak investor protection. The authors' findings exhibit the effectiveness of board attributes in producing better financial information quality in Tunisia. This is useful for investors who may improve their capital allocation decisions by assigning greater weights to target price forecasts of companies with good governance quality, suggesting that good corporate governance is a credible signal of better financial information quality. These results have important implications for capital market regulators and corporate management in encouraging the implementation of good governance practices.

The authors attempted to assess whether corporate governance of listed firms are priced in the Tunisian context characterised by weak governance control and to highlight which mechanism is highly considered by independent financial analysts to build their forecasts.

The purpose of this study is to explore at what stage of a company’s life cycle the theory of market timing has explained debt. Drawing on a unified conceptual framework of market timing theory, the authors scrutinize the impact of life cycle and ownership structure on the market condition.

Based on a sample of 24 Tunisian companies listed on the stock exchange and 100 French firms listed on the CAC All-Tradable on a 10-year period, this paper grounded the market timing theory and attempted to clear the relation between ownership structure, life cycle of the firm and market timing theory by statistical analysis.

The findings of panel data modeling indicate that when the life cycle was used as an explanatory variable, it was found that the variable reflecting the market timing is not significant in either context; it means that no significant support is found in the theory of market timing in both countries. Whereas when the life cycle was used as a dummy variable, it was found that the life cycle has an impact on debt only in the Tunisian context.

This study has several important implications for researchers and practitioners. The findings reported here clarify the strength of the impact of life cycle on the market timing, when it explains the debt in the two contexts and the impact of ownership structure such as the managerial ownership and concentration of capital on debt.

This study contributes to examine the theory of debt in different phases of life cycle. Focused on the case of Tunisian and French firms, this study is unique and valuable.

The purpose of this paper is to examine the relationship between state ownership and firm profitability in developing countries by considering the endogenous nature of state ownership and firm profitability.

A simultaneous equation analysis is applied to study 232 Tunisian firms over the 2001-2013 period. This analysis is compared with OLS estimates to show its power in terms of an endogenous setting and its potential to improve estimation.

Unlike the OLS estimates that show a non-significant relationship between state ownership and firm profitability, the simultaneous equation analysis reveals a non-symmetrical concave relationship. Specifically, state ownership affects positively firm profitability when it is relatively small and negatively when state ownership dominates. Specification test indicates that both state ownership and firm profitability are endogenous. Furthermore, the simultaneous model’s explanatory power exceeds that of OLS estimates and proves to be a suitable estimation technique.

Taking into account public firms’ categorization, the authors implicitly examine the effect of privatization and corporatization on firm profitability. The findings imply that privatization is not the only solution to the operational problems of public firms, but an internal governance system restructuring can also be favorable for these firms.

In addition to focusing on a new database of developing countries, the case of Tunisian firms, the main empirical analysis is conducted by considering the endogeneity issue. Thus, the findings improve understanding of the role played by state ownership and suggest that a partial state control appears to be beneficial to firm profitability.