Tax planning and corporate governance: effects on shareholders’ valuation

Abdul Wahab, Nor Shaipah (2010) Tax planning and corporate governance: effects on shareholders’ valuation University of Southampton, School of Management, Doctoral Thesis , 345pp.


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Tax planning by large companies has been widely and publicly discussed due to its implications for the level of provision of public goods and more general social
issues. In the U.K., tax avoidance, as estimated by Her Majesty’s Revenue and Customs’ anti-avoidance group, leads to several billion pounds of lost revenue each year. Consequently, the authorities implement tax investigation through risk classification assessments. The prospect of an adverse assessment may influence company directors when making tax planning decisions and similar risk concerns may influence shareholders in valuing tax planning activities. This study reports the results of an investigation of the relationship between firm value and tax planning whilst simultaneously considering corporate governance as a moderating influence. The sample of firms examined consists of non-financial London Stock Exchange-listed companies from 2005 to 2007. The results indicate a negative relationship between firm value and tax planning activities which is unconditional upon corporate governance conditions for both persistent and non-persistent profit-making companies. This relationship can be further explained as being related to the permanent differences component of tax saving where firm value is reported as negatively related to permanent differences. The findings of this study contribute to the body of knowledge since there is a general dearth of published research study from outside the U.S. that investigates these relationships.

Item Type: Thesis (Doctoral)
Organisations: University of Southampton
ePrint ID: 162801
Date :
Date Event
June 2010Published
Date Deposited: 15 Sep 2010 14:47
Last Modified: 18 Apr 2017 03:45
Further Information:Google Scholar

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