Staff View: The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah

The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah

The debate on the implication of fiscal incentives is extensive. Nevertheless, whether tax incentives succeed in stimulating firm performance remains highly controversial and has received much attention from governments and policymakers. We aimed at providing evidence about the effect of RA and othe...

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Main Author:	A. Hamzah, Fairus Halizam
Format:	Book Section
Language:	English
Published:	Faculty of Accountancy 2019
Subjects:	Financial management. Business finance. Corporation finance Investment, capital formation, speculation
Online Access:	http://ir.uitm.edu.my/id/eprint/43543/1/43543.pdf http://ir.uitm.edu.my/id/eprint/43543/
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id	my.uitm.ir.43543
record_format	eprints
spelling	my.uitm.ir.435432021-03-19T03:57:48Z http://ir.uitm.edu.my/id/eprint/43543/ The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah A. Hamzah, Fairus Halizam Financial management. Business finance. Corporation finance Investment, capital formation, speculation The debate on the implication of fiscal incentives is extensive. Nevertheless, whether tax incentives succeed in stimulating firm performance remains highly controversial and has received much attention from governments and policymakers. We aimed at providing evidence about the effect of RA and other tax attributes on firm performance. Secondly, we examined if firm directorship has a moderating effect on our regression estimation. To fully understand the effects of fiscal incentives, a systematic study is needed to link RA to not just business location, employment, economic implication development but also to the overarching issues of firm performance and growth. This research uses the Panel Least Square regression model to examine the interplay between RA and other tax attributes on firm-level performance measured by return on asset. Employing tax return data from 2007 to 2016 of corporate firms consistently claiming RA, this research affirms that RA has positively impacted the performance of incentivised firms in Malaysia. Besides RA, these incentivised firms also depend on other tax attributes such as lower effective tax rate, various tax benefits, the firm scale of operation as well as adequate tax audit monitoring. We also affirm that foreign directorship only moderates one of the tested explanatory variables used in this research, which is the effective tax rate (ETR). Overall, the evidence in this research-driven extensively by responses of the incentivised firms which addresses the issue of effective incentive utilisation and tax attributes. This research could be the first to contribute evidence on the systematic assessment of RA. Faculty of Accountancy A. Hamzah, Fairus Halizam Abd Hamid, Nadiah Mohd Zawawi, Siti Noor Hayati Jaafar, Salmah Md Azali, Norazah 2019 Book Section PeerReviewed text en http://ir.uitm.edu.my/id/eprint/43543/1/43543.pdf A. Hamzah, Fairus Halizam (2019) The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah. In: ICAM2019 – International Conference on Accounting and Management. Faculty of Accountancy, Universiti Teknologi MARA Puncak Alam, Selangor, p. 41. ISBN 978-967-17038-0-9
institution	Universiti Teknologi Mara
building	Tun Abdul Razak Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Teknologi Mara
content_source	UiTM Institutional Repository
url_provider	http://ir.uitm.edu.my/
language	English
topic	Financial management. Business finance. Corporation finance Investment, capital formation, speculation
spellingShingle	Financial management. Business finance. Corporation finance Investment, capital formation, speculation A. Hamzah, Fairus Halizam The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah
description	The debate on the implication of fiscal incentives is extensive. Nevertheless, whether tax incentives succeed in stimulating firm performance remains highly controversial and has received much attention from governments and policymakers. We aimed at providing evidence about the effect of RA and other tax attributes on firm performance. Secondly, we examined if firm directorship has a moderating effect on our regression estimation. To fully understand the effects of fiscal incentives, a systematic study is needed to link RA to not just business location, employment, economic implication development but also to the overarching issues of firm performance and growth. This research uses the Panel Least Square regression model to examine the interplay between RA and other tax attributes on firm-level performance measured by return on asset. Employing tax return data from 2007 to 2016 of corporate firms consistently claiming RA, this research affirms that RA has positively impacted the performance of incentivised firms in Malaysia. Besides RA, these incentivised firms also depend on other tax attributes such as lower effective tax rate, various tax benefits, the firm scale of operation as well as adequate tax audit monitoring. We also affirm that foreign directorship only moderates one of the tested explanatory variables used in this research, which is the effective tax rate (ETR). Overall, the evidence in this research-driven extensively by responses of the incentivised firms which addresses the issue of effective incentive utilisation and tax attributes. This research could be the first to contribute evidence on the systematic assessment of RA.
author2	A. Hamzah, Fairus Halizam
author_facet	A. Hamzah, Fairus Halizam A. Hamzah, Fairus Halizam
format	Book Section
author	A. Hamzah, Fairus Halizam
author_sort	A. Hamzah, Fairus Halizam
title	The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah
title_short	The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah
title_full	The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah
title_fullStr	The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah
title_full_unstemmed	The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah
title_sort	effectiveness of reinvestment allowance (ra) and tax attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / fairus halizam a. hamzah
publisher	Faculty of Accountancy
publishDate	2019
url	http://ir.uitm.edu.my/id/eprint/43543/1/43543.pdf http://ir.uitm.edu.my/id/eprint/43543/
_version_	1695534687489884160
score	13.211869

The effectiveness of Reinvestment Allowance (RA) and Tax Attributes in stimulating the performance of incentivised firms: moderating effects of foreign directorship / Fairus Halizam A. Hamzah

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