The impact of corporate governance on corporate tax avoidance in Malaysia / Koay Guo Yao
The purpose of this study is to examine the relationship between corporate governance and corporate tax avoidance in Malaysia. This study analyses a sample of 387 firm-year observations from large listed companies on Bursa Malaysia across the 2016 – 2020 period using a fixed effect panel least sq...
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| Format: | Thesis |
| Published: |
2022
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| Online Access: | http://studentsrepo.um.edu.my/15662/2/Koay_Guo_Yao.pdf http://studentsrepo.um.edu.my/15662/1/Koay_Guo_Yao.pdf http://studentsrepo.um.edu.my/15662/ |
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| Summary: | The purpose of this study is to examine the relationship between corporate governance and
corporate tax avoidance in Malaysia. This study analyses a sample of 387 firm-year
observations from large listed companies on Bursa Malaysia across the 2016 – 2020 period
using a fixed effect panel least squares regression model. It reveals that CEO compensation
has a significant positive relationship with corporate tax avoidance, which shows that higher
pay could induce and motivate CEOs to engage in more tax avoidance activities for their
companies. However, little evidence is documented on the impact of other corporate
governance structures, including board gender diversity, on a company’s tax avoidance level.
This suggests that corporate governance has limited influence on a company’s tax
compliance matters in Malaysia, contrary to evidence mainly from developed countries.
While this study, as with other quantitative studies, may not be able to explain the reality of
the results, the authors provided rather comprehensive explanations on the findings to help
with one’s understanding on the topic. This study contributes in extending the literature of
tax research in Malaysia, and enriches the literature on governance and tax by providing
unique evidence and insights from a developing country. To the best of the authors’
knowledge, this study is also the first to examine the effects of board gender diversity on
corporate tax avoidance in Malaysia.
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