英文摘要 |
This study investigates the influence of tax avoidance on the cost of debt and itsinteraction effect with institutional investors. The empirical results indicate that asubstitution relationship exists between tax avoidance and the cost of debt among firmsin Taiwan. The results imply that the tax-savings effect of tax avoidance dominatesmanagerial opportunism in the relationship between tax avoidance and the cost of debt forTaiwanese firms. Moreover, the result suggests that firms with larger institutional holdingshave a lower cost of debt, implying that institutional investors can reduce informationasymmetry and managerial rent diversions related to tax avoidance, thereby amplifyingthe negative effect of tax avoidance on the cost of debt. Our findings contribute to researchon tax avoidance by providing direct evidence on how debtholders in Taiwan perceivecorporate tax avoidance. Based on our findings, firms are encouraged to implement orstrengthen their corporate governance by strengthening the role of institutional investors. |