Foreign investors’ interests and corporate tax avoidance: evidence from an emerging economy
Foreign investment inflows into developing countries has become a cause for concern, as the opportunity for profit shifting across their various operating outlets has made multinational companies tax avoidant in host countries. Thus, this study examines the tax impact of foreign investors’ intere...
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| Format: | Article |
| Language: | English English |
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Elsevier
2015
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| Online Access: | http://irep.iium.edu.my/42902/ http://irep.iium.edu.my/42902/1/JCAE_-_Foreign_Investors%27_Interests_and_Corporate_Tax_Avoidance.pdf http://irep.iium.edu.my/42902/4/42902_Foreign%20investors%E2%80%99%20interests%20and%20corporate_SCOPUS.pdf |
| _version_ | 1848782351458369536 |
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| author | Salihu, Ibrahim Aramide Annuar, Hairul Azlan Sheikh Obid, Siti Normala |
| author_facet | Salihu, Ibrahim Aramide Annuar, Hairul Azlan Sheikh Obid, Siti Normala |
| author_sort | Salihu, Ibrahim Aramide |
| building | IIUM Repository |
| collection | Online Access |
| description | Foreign investment inflows into developing countries has become a cause for concern, as
the opportunity for profit shifting across their various operating outlets has made multinational
companies tax avoidant in host countries. Thus, this study examines the tax impact
of foreign investors’ interests within a host developing economy. The sample data were
extracted from annual reports of the FTSE Bursa Malaysia Top 100 firms for the financial
periods of 2009, 2010 and 2011. Using four similar measures of tax avoidance and three
related measures of foreign investors’ interest, our analysis of the dynamic panel data with
a system GMM estimator shows significant positive relationships between foreign investors’
interests and the measures of corporate tax avoidance among large Malaysian companies.
This result suggests the possibility of multinational companies exploiting their international
scales of operations to avoid taxes in both host and parent countries. Thus, emerging
economies need to consider the residual benefits of foreign direct investment in the presence
of such tax avoidance in their pursuit of economic development. |
| first_indexed | 2025-11-14T16:04:05Z |
| format | Article |
| id | iium-42902 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English English |
| last_indexed | 2025-11-14T16:04:05Z |
| publishDate | 2015 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-429022017-11-08T04:26:17Z http://irep.iium.edu.my/42902/ Foreign investors’ interests and corporate tax avoidance: evidence from an emerging economy Salihu, Ibrahim Aramide Annuar, Hairul Azlan Sheikh Obid, Siti Normala HF5601 Accounting. Bookkeeping Foreign investment inflows into developing countries has become a cause for concern, as the opportunity for profit shifting across their various operating outlets has made multinational companies tax avoidant in host countries. Thus, this study examines the tax impact of foreign investors’ interests within a host developing economy. The sample data were extracted from annual reports of the FTSE Bursa Malaysia Top 100 firms for the financial periods of 2009, 2010 and 2011. Using four similar measures of tax avoidance and three related measures of foreign investors’ interest, our analysis of the dynamic panel data with a system GMM estimator shows significant positive relationships between foreign investors’ interests and the measures of corporate tax avoidance among large Malaysian companies. This result suggests the possibility of multinational companies exploiting their international scales of operations to avoid taxes in both host and parent countries. Thus, emerging economies need to consider the residual benefits of foreign direct investment in the presence of such tax avoidance in their pursuit of economic development. Elsevier 2015 Article PeerReviewed application/pdf en http://irep.iium.edu.my/42902/1/JCAE_-_Foreign_Investors%27_Interests_and_Corporate_Tax_Avoidance.pdf application/pdf en http://irep.iium.edu.my/42902/4/42902_Foreign%20investors%E2%80%99%20interests%20and%20corporate_SCOPUS.pdf Salihu, Ibrahim Aramide and Annuar, Hairul Azlan and Sheikh Obid, Siti Normala (2015) Foreign investors’ interests and corporate tax avoidance: evidence from an emerging economy. Journal of Contemporary Accounting & Economics, 11. pp. 138-147. ISSN 1815 5669 http://www.sciencedirect.com/science/journal/18155669 |
| spellingShingle | HF5601 Accounting. Bookkeeping Salihu, Ibrahim Aramide Annuar, Hairul Azlan Sheikh Obid, Siti Normala Foreign investors’ interests and corporate tax avoidance: evidence from an emerging economy |
| title | Foreign investors’ interests and corporate tax avoidance:
evidence from an emerging economy |
| title_full | Foreign investors’ interests and corporate tax avoidance:
evidence from an emerging economy |
| title_fullStr | Foreign investors’ interests and corporate tax avoidance:
evidence from an emerging economy |
| title_full_unstemmed | Foreign investors’ interests and corporate tax avoidance:
evidence from an emerging economy |
| title_short | Foreign investors’ interests and corporate tax avoidance:
evidence from an emerging economy |
| title_sort | foreign investors’ interests and corporate tax avoidance:
evidence from an emerging economy |
| topic | HF5601 Accounting. Bookkeeping |
| url | http://irep.iium.edu.my/42902/ http://irep.iium.edu.my/42902/ http://irep.iium.edu.my/42902/1/JCAE_-_Foreign_Investors%27_Interests_and_Corporate_Tax_Avoidance.pdf http://irep.iium.edu.my/42902/4/42902_Foreign%20investors%E2%80%99%20interests%20and%20corporate_SCOPUS.pdf |