THE IMPACT OF TAX AVOIDANCE ON FIRM VALUE: A STUDY OF CONSTRUCTION COMPANIES LISTED ON THE VIETNAMESE STOCK EXCHANGE

Abstract

This study aims to analyze the impact of tax avoidance on firm value, while also incorporating control variables such as return on assets (ROA), current ratio, financial leverage, and firm size in shaping the competitiveness of businesses amid increasing transparency in the tax system. Ordinary Least Squares (OLS), Fixed Effects Model (FEM), Random Effects Model (REM), and Generalized Least Squares (GLS) regression methods were employed, based on data collected from Vietstock for the period 2016– 2024, with a sample of 129 construction companies listed on the Vietnamese stock market. The results indicate that tax avoidance positively affects firm value; ROA and the current ratio are significant drivers of increased firm value; financial leverage has a negative effect; and firm size has a positive but statistically insignificant impact on firm value. This study provides additional evidence to the existing literature on the influence of tax avoidance strategies on firm value in the digital era. Furthermore, it offers practical recommendations for construction companies regarding tax avoidance practices and the enhancement of firm value.