Foreign investors' interests and corporate tax avoidance: evidence from an emerging economy
The inflows of foreign investments into the developing countries have called for concerns. The opportunity for profit shifting across their various operating outlets has made multinational companies tax avoidant in the host countries. This study, thus, examines the tax impact of foreign investors...
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| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
2014
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/36327/1/Conference_JCAE_%28actual%29.pdf http://irep.iium.edu.my/36327/ http://www.buseco.monash.edu.my/2014-jcae/index.html |
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| Summary: | The inflows of foreign investments into the developing countries have called for
concerns. The opportunity for profit shifting across their various operating outlets
has made multinational companies tax avoidant in the host countries. This study,
thus, examines the tax impact of foreign investors’ interests within the host
developing economy. Using four similar measures of tax avoidance and three
related measures of foreign investors’ interests, the sample data came from FTSE
Bursa Malaysia Top 100 firms for the financial periods of 2009, 2010 and 2011.
The analysis of the dynamic penal data using the system GMM estimator shows
significant positive relationships between foreign investors’ interests and the
measures of corporate tax avoidance among Malaysian large companies. Apart
from being a useful guide for the selection of companies for tax audit, this result
is also relevant for the proper evaluation of policies regarding foreign direct
investment (FDI) in developing economies. |
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