Investigating the effect of tax risk on investment sensitivity

The issue of investment sensitivity is one of the topics that has recently been considered by financial researchers. This literature is more clearly related to the financing literature and the investment literature. Each company-specific transaction has a unique amount of economic risk and tax law uncertainty; And as the transaction between economic risk and tax law uncertainty about the company's overall tax strategies increases, so does the company's overall tax risk. The economic component of decisions is actions with reactions by taxpayers (tax authorities) that lead to unforeseen tax returns. The purpose of this study was to investigate the effect of tax risk on the investment sensitivity of companies listed on the Tehran Stock Exchange. It was analyzed that the results showed that tax risk has a direct and significant effect on investment sensitivity, that is, with increasing tax risk, investors' sensitivity also increases.