IDEAS home Printed from https://ideas.repec.org/a/rbs/ijfbss/v11y2022i1p207-219.html
   My bibliography  Save this article

Managerial and Financial Capabilities Become Determining Factors of Tax Avoidance Practice in Indonesia

Author

Listed:
  • Alamanda Rizka Hasanah

    (Department of Economic and Business, Universitas Pembangunan Nasional Veteran Jakarta, Jakarta, Indonesia)

  • Ni Putu Eka Widiastuti

    (Department of Economic and Business, Universitas Pembangunan Nasional Veteran Jakarta, Jakarta, Indonesia)

Abstract

Differences in interests related to taxation between the government and companies are still a current issue. The purpose of this study is to examine the impact of managerial and financial competencies on tax avoidance in Indonesian manufacturing companies. 149 financial statements of companies listed on the Indonesia Stock Exchange were used to compile the data. Panel data regression with a random-effects model was used to test and analyze the data. The findings revealed that financial challenges and managerial ability had a detrimental impact on tax avoidance, but there was no influence between the audit committee on tax avoidance. As for the control variable, there is a positive influence between profitability on tax avoidance, and there is no influence between leverage on tax avoidance.

Suggested Citation

  • Alamanda Rizka Hasanah & Ni Putu Eka Widiastuti, 2022. "Managerial and Financial Capabilities Become Determining Factors of Tax Avoidance Practice in Indonesia," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 11(1), pages 207-219, January.
    • Handle: RePEc:rbs:ijfbss:v:11:y:2022:i:1:p:207-219
    as

    Download full text from publisher

    File URL: https://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/1702/1230
    Download Restriction: no
    File URL: https://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/1702
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Allison Koester & Terry Shevlin & Daniel Wangerin, 2017. "The Role of Managerial Ability in Corporate Tax Avoidance," Management Science, INFORMS, vol. 63(10), pages 3285-3310, October.
    2. Peter Demerjian & Baruch Lev & Sarah McVay, 2012. "Quantifying Managerial Ability: A New Measure and Validity Tests," Management Science, INFORMS, vol. 58(7), pages 1229-1248, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bui, Dien Giau & Chen, Yehning & Chen, Yan-Shing & Lin, Chih-Yung, 2023. "Managerial ability and financial statement disaggregation decisions," Journal of Empirical Finance, Elsevier, vol. 74(C).
    2. James, Hui Liang & Ngo, Thanh & Wang, Hongxia, 2023. "The impact of more able managers on corporate trade credit," Journal of Behavioral and Experimental Finance, Elsevier, vol. 40(C).
    3. Yicheng Wang & Brian Wright, 2024. "Tax-strategy-related words, firm’s ability, and tax avoidance," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(4), pages 685-713, December.
    4. Shen, Jianghua & Xie, Lingmin, 2023. "Managerial ability and investment to price sensitivity," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 928-941.
    5. Vuong, Giang Thi Huong & Nguyen, Phuc Van & Barky, Walid & Nguyen, Manh Huu, 2024. "Stock return volatility and financial distress: Moderating roles of ownership structure, managerial ability, and financial constraints," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 634-652.
    6. Manthos D. Delis & Pantelis Kazakis & Constantin Zopounidis, 2021. "Management Practices and Takeover Decisions," Working Papers 2021_10, Business School - Economics, University of Glasgow.
    7. Delis, Manthos D. & Iosifidi, Maria & Tsionas, Mike, 2020. "Management estimation in banking," European Journal of Operational Research, Elsevier, vol. 284(1), pages 355-372.
    8. Nguyen, Hung T. & Pham, Mia Hang & Truong, Cameron, 2023. "Leadership in a pandemic: Do more able managers keep firms out of trouble?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    9. Leon Zolotoy & Don O’Sullivan & Geoffrey P. Martin, 2022. "Behavioural Agency and Firm Productivity: Revisiting the Incentive Alignment Qualities of Stock Options," Journal of Management Studies, Wiley Blackwell, vol. 59(7), pages 1756-1787, November.
    10. repec:hig:wpaper:96/fe/2025 is not listed on IDEAS
    11. Panagiotis Karavitis & Pantelis Kazakis & Tianyue Xu, 2022. "CFO Working Experience and Tax Avoidance," Working Papers 2022_14, Business School - Economics, University of Glasgow.
    12. Wali Ullah, G M & Luo, Juan & Yawson, Alfred, 2024. "Managerial ability and supply chain power," Journal of Contemporary Accounting and Economics, Elsevier, vol. 20(2).
    13. Kaijuan Gao & Chenglong Wang & Qi Su & Hanxiao Shen, 2020. "Do analysts follow firms with able managers?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1602-1612, December.
    14. Yingzhao Xiao & Liuyang Xue & David Ahlstrom & Chundong Zheng & Xiling Hao, 2024. "To Conform or Not to Conform? The Role of Social Status and Firm Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 193(3), pages 655-677, September.
    15. Khoo, Joye & (Wai Kong) Cheung, Adrian, 2022. "Managerial ability and debt maturity," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(1).
    16. Canan C. Mutlu & Sunay Mutlu & Steve Sauerwald, 2021. "CEO outside directorships and managerial efficiency: The role of host board capital," Corporate Governance: An International Review, Wiley Blackwell, vol. 29(1), pages 45-66, January.
    17. Aleksi Eerola & Arjen H. L. Slangen, 2022. "A Review of International Management Research on Corporate Taxation," Management International Review, Springer, vol. 62(5), pages 643-680, October.
    18. Qiubin Huang & Mengyuan Xiong & Ming Xiao, 2022. "Does managerial ability affect corporate financial constraints? Evidence from China," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 3731-3753, December.
    19. Gaganis, Chrysovalantis & Galariotis, Emilios & Pasiouras, Fotios & Tasiou, Menelaos, 2023. "Managerial ability and corporate greenhouse gas emissions," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 438-453.
    20. Ben Abdesslem, Rim & Chkir, Imed & Dabbou, Halim, 2022. "Is managerial ability a moderator? The effect of credit risk and liquidity risk on the likelihood of bank default," International Review of Financial Analysis, Elsevier, vol. 80(C).
    21. Fu, Junhui & Chen, Xingwei & Liu, Yufang & Chen, Rongda, 2022. "Managerial ability and stock price synchronicity," Research in International Business and Finance, Elsevier, vol. 60(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rbs:ijfbss:v:11:y:2022:i:1:p:207-219. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hasan Dincer (email available below). General contact details of provider: https://edirc.repec.org/data/ssbffea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.