The Effectiveness of Management Ability on Firm Value and Tax Avoidance

Maryam Seifzadeh ()
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Maryam Seifzadeh: Department of Economics and Administrative Sciences, Qeshm International Branch of Islamic Azad University, Qeshm 79515/1393, Iran

JRFM, 2022, vol. 15, issue 11, 1-15

Abstract: The current study investigates the relationship between tax avoidance, management ability, and firm value. Three hypotheses are proposed to meet the paper’s objective. For conducting such a practical study based on a post-event descriptive correlational approach, data are gathered from the website of the Tehran Stock Exchange during 2014–2020. A total of 183 companies were selected through the systematic elimination method and analyzed using the R statistical software. The results indicated a negative relationship between managerial ability and tax avoidance. Moreover, we find a significant negative relationship between tax avoidance and firm value. Finally, the findings argue that in companies with high-ability managers, the intensity of the negative relationship between tax avoidance and firm value is mitigated.

Keywords: tax avoidance; managerial ability; firm value (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
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