The association between competition power in markets and tax avoidance: evidence from Tehran stock exchange
Behnam Karamshahi (),
Zeinab Azami () and
Tabandeh Salehi ()
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Behnam Karamshahi: Shahid Bahonar University of Kerman
Zeinab Azami: Shahid Bahonar University of Kerman
Tabandeh Salehi: Shahid Bahonar University of Kerman
Eurasian Business Review, 2018, vol. 8, issue 3, No 5, 323-339
Abstract:
Abstract The current research aimed at studying the association between the power of competition in markets and tax avoidance in the companies complied with Tehran stock exchange. To evaluate competition power in the markets, 2 variables are used, namely, Herfindahl-Hirschman Index (HHI) and entrance obstacles. The dependent variables in this paper were effective tax rate (ETR) and adjusted non-taxable income. The research sample included 72 companies listed on Tehran Stock Exchange during 2006–2015. To assess the research hypotheses, a multi-variable regression was utilized. The research findings revealed a negative relationship between HHI and the ratio of entrance obstacles on the one hand and ETR on the other hand. Thus, the higher the power of competition in a company was, the more the tax avoidance was found. Also, a significant association was observed between HHI and the adjusted non-taxable income. Finally, no significant relationship was seen between the entrance obstacles and adjusted non-taxable incomes.
Keywords: Tax avoidance; Competition power in the market; Herfindahl-Hirschman Index (HHI); Adjusted non-taxable income (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)
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DOI: 10.1007/s40821-017-0082-8
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