Effects of Agency Cost and Liquidity on Tax Avoidance by the Use of Profitability
Author(s):
Article Type:
Research/Original Article (دارای رتبه معتبر)
Abstract:
Objective
The purpose of this study is to analyze the simultaneous effects of liquidity and agency cost on tax avoidance, considering the profitability of the companies listed in the Tehran Stock Exchange in the period 2012 to 2016.
Method
Three hypotheses were considered based on the simultaneous impacts of variables on tax avoidance. The data were collected by referring to databases as well as documentations review. Data analysis was performed, using a 2sls method in Eviews.
Results
The results showed that profitability has the ability to explain the impacts of each of the variables of liquidity and agency cost as endogenous variables, properly. According to the results of simultaneous equations analysis, liquidity has positive impact and agency cost has negative impact on tax avoidance.
Conclusion
More focus on profitability can be useful in improving the economic decisions of investors, and the analysis of the effects of variables such as agency cost and liquidity on tax avoidance in the companies with no regard to profitability will not lead necessarily to proper outcome.Keywords:
Language:
Persian
Published:
Journal of Accounting Knowledge, Volume:10 Issue: 36, 2019
Pages:
115 to 136
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