The Influence of Tax Aggressiveness as an Intervening Variable on the Relationship between Managerial Ownership and Firm Value
Christian Raditya Widyanto1, Ari Budi Kristanto2, Usil Sis Sucahyo3
1Christian Raditya Widyanto, Universitas Kristen Satya Wacana, Jl. Diponegoro Salatiga, Indonesia.
2Ari Budi Kristanto, Universitas Kristen Satya Wacana, Jl. Diponegoro Salatiga, Indonesia.
3Usil Sis Sucahyo, Universitas Kristen Satya Wacana, Jl. Diponegoro Salatiga, Indonesia.
Manuscript received on 07 May 2019 | Revised Manuscript received on 19 May 2019 | Manuscript Published on 23 May 2019 | PP: 965-971 | Volume-7 Issue-6S5 April 2019 | Retrieval Number: F11660476S519/2019©BEIESP
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Managers are motivated to behave aggressively in tax planning, to optimize the profit. Nevertheless, too aggressive tax planning can also result in inefficiency. The study aims to show empirical evidence of the effect of managerial ownership on firm value, using tax aggressiveness as an intervening variable on manufacturing companies listed on the Indonesia Stock Exchange during 2012-2014. The samples were taken using purposive sampling method, resulting 63 firm-years observations. Furthermore, the hypotheses are tested using panel data analysis, and Sobel test to examine the influence of intervening variable. The hypotheses testing conveys the result that managerial ownership has a significant positive effect on firm value. Managerial ownership has no significant impact on tax aggressiveness. Tax aggressiveness has a significant negative effect on firm value. The tax aggressiveness has no intervening effect on the positive relationship between managerial ownership and firm value. The results of this study imply that management may apply tax management wisely since tax aggressiveness proved to have a negative effect on the firm value. For shareholders, this information is useful in management control behavior planning, utilizing management ownership and tax avoidance behavior control.
Keywords: Tax Aggressiveness, Managerial Ownership, Firm Value.
Scope of the Article: Social Sciences