Title: INFLUENCE OF INNOVATION ON COMPANY VALUE THROUGH TAX AVOIDANCE
Author: ANJELINA
Affiliations : Masters Program in Accounting, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia
Publisher: Universitas Airlangga
Abstract
This research aims to test the effect of innovation on tax avoidance and company value, as well as test the effect of tax avoidance on company value. This research uses a sample of manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2007-2017, a total sample of 133 companies with 1025 observations. The analysis technique used is panel data regression analysis with the STATA 13 program. Innovation is measured using two proxies, namely the number of patents and R&D intensity on sales, while tax avoidance is measured by three proxies, namely GAAP ETR (Effective Tax Rate), CETR (Cash Effective Tax Rate), and BTD (Book Tax Difference); and firm value is measured by TobinsQ. The results of this research are (1) innovation has a significant negative effect on tax avoidance, (2) tax avoidance has a significant positive effect on firm value, (3) innovation has a significant positive effect on firm value, and (4) tax avoidance is not a mediating variable on the innovation relationship and company value. This research proves that companies that have many patents do not avoid tax. This finding can be seen from the small difference in accounting and fiscal profits in these innovative companies. This also shows that companies that innovate do not divert their profits through tax avoidance to keep innovating. Furthermore, this research found that the higher the innovation, the higher the value of the company. This result supports the signal theory which states that innovation is a positive signal for the company because innovation reflects the company's competitive ability, so it will increase the value of the company.
Keywords: Innovation, R&D expenses scaled sales, patent, tax avoidance, firm value
Sources: http://repository.unair.ac.id/80359/
