The impact of tax avoidance on corporate value and the moderation role of tax risk in Viet Nam

Abstract

The study was conducted to examine the moderation of tax risk on the impact of tax avoidance on corporate value in Viet Nam. The data sample used is 397 businesses listed on the Vietnamese stock market (HOSE and HNX) from 2015 to 2022 with 3,176 observations. The S-GMM method is used, research results show that tax avoidance has a positive impact on corporate value in Viet Nam; Tax risk moderates the positive impact tax avoidance on corporate value. Accordingly, the main finding of this study is that the ratio of revenue to related parties and the ratio of institutional ownership weaken the positive impact of tax avoidance on corporate value. Based on the research results, the authors make several recommendations to mitigate tax risks for investors in order to optimize investment efficiency, and for business managers to promote sustainable business development.