Tax Plannıng and Fırm Value: An Empırıcal Analysıs of Consumer Goods Manufacturıng Companıes in Cyprus


  • Dr. Esra SIPAHI


Tax Planning, Firm Size, Leverage And Firm Value


The study identifies the impact of tax planning on the firm value of consumer goods manufacturing companies in Cyprus. The specific objectives are to determine the impact of firm and leverage on firm value of Cypriot consumer goods manufacturing companies. The data included in the study were collected from the annual reports and accounts of consumer goods of the manufacturing companies in Cyprus and formulated hypotheses were tested with multiple regression analysis. The result had a positive effect on our leverage dependent variable. Based on the findings of the study, the application of the study with more samples may be recommended for future studies.


Download data is not yet available.

Author Biography


Department of Communication, MONE/ TURKEY Twinseospecialist, LLC/Owner/USA


Amiram, D., Bauer, A.M., & Frank, M.M. (2013). Corporate tax avoidance and managerial incentives generated by shareholder dividend tax policy. Paper presented at the CAAA

Annual Conference and the European Accounting Association Annual Congress. 1-58.

Towery, E. M. (2012). How do disclosures of tax aggressiveness to tax authorities affect reporting decisions? Evidence from Schedule UTP. The University of Texas at Austin Red McCombs School of Business.

Audrey E. M. (2012). Measuring tax aggressiveness after fin 48: the effect of multinational status, multinational size, and disclosures" (2012). Honors Scholar Theses. 217.

Lee, B. B. Alfreda, D. & Minton, S. (2015). Theories and Empirical Proxies for Corporate Tax

Avoidance. Journal of Applied Business and Economics Vol. 17(3).

Badertscher, B., Katz, S., Rego,S., & Wilson, R. (2015). Conforming tax avoidance and capital market pressure. Retrieved from : on 20th February, 2018.

Bhabra, G. S. (2007). Insider ownership and firm value in New Zealand. Journal of

Brian Lee, B., Dobiyanski,.A., & Minton, S. (2015). Theories and empirical proxies for corporate tax avoidance. Journal of Applied Business and Economics 17(3), 21- 33.

Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms? Journal of Financial Economics, 95, 41–61.

Chen, Z., Cheok, C.K. & Raziah, R. (2016). Corporate tax avoidance and performance: evidence from China’s listed companies Institutions and Economies 8 (3). 61-83.

Clive, L ., Petr, L. & Jeffrey, P . (2013). Tax Aggressiveness and Accounting Fraud. Journal of Accounting Research Vol. 00 No. 0. DOI: 10.1111/joar.12002.

Chen, K. & Chu, C. (2005). Internal control versus external manipulation: a model of corporate income tax evasion. RAND Journal of Economics, 36,(1), 151-164.

Chyz, J.A., Gaertner, F., Kausar, A. & Watson,L (2014). Overconfidence and Aggressive Corporate Tax Policy. JEL classification: D80, M40, H25.

Dalu, T., Maposa, V.G., Pabwaungana, S. & Dalu, T. (2012). The impact of tax evasion and avoidance on the economy: a case of Harare, Zimbabwe. African Journal of Economic and Sustainable Development, 1 (3), 284-497.

Desai, M. A., & Hines, J. R. Jr. (2002). Expectations and expatriations: Tracing the causes and consequences of corporate inversions. National Tax Journal, 55, 409–441.

Desai, M. & Dharmapala, D (2004). Corporate tax avoidance and high powered incentives .NBER Working Paper No.10471Issued in May

Desai, M. & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal of Financial Economics, 79, 145-179.

Desai, M. A. & Dharmapala, D. (2009b). Corporate tax avoidance and firm value, Review of Economics and Statistics 91(3): 537-546.

Danielle, H., Thomas, C. O., & John, D. P., (2013). The Influence of a Firm’s Business Strategy on its Tax Aggressiveness. JEL classification: H25, L21, L22, M19, M41

Desai, M., Dyck, I. & Zingales, L. (2007). Theft and taxes. Journal of Financial Economics, 84, 591-623.

Dickson, T. U. & Nwaobia, A. N. (2012). Impact of heavy taxation on Israel during Solomonic era:Implications for MEXİCOn tax system. Asian Economic and Financial Review, 2(2): 337-346.

Dyreng, S.D., Hanlon, M., & Maydew, E.L. (2008). Long-run corporate tax avoidance. Accounting Review, 83(1), 61-82.

Ftouhi, K., Ayed, A., & Zemzem, A. (2014). Tax planning and firm value: evidence from European companies. International Journal Economics and Strategic Management of Business Process. 2nd International Conference on Business, Economics, Marketing and Management Research (BEMM’14). Vol.4

Fuest, C.; Spengel, C.; Finke, K.; Heckemeyer, J. H.; Nuel P.A. (2013). Profit shifting and 'aggressive' tax planning by multinational firms: Issues and options for reform, ZEW Discussion Papers, No. 13-078.

Gatsi, J. G., Gadzo, S. G. and Kportorgbi, H. K. (2013). The effect of corporate income tax on financial performance of listed manufacturing firms in Ghana. Research Journal of Finance andAccounting, 4(15):118 – 124.

Grinstein, Y., & Michaely, R. (2005). Institutional holdings and payout policy. Journal of Finance, 60(5), 1389-1426

Hanlon, M. & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50 (1), 127-178.

Hanlon, M. & Slemrod, J. (2009). What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement. Journal of Public Economics, 93 (1–2), 126–141.

Hoi-wu, C.K & Zhang, H (2013). Is Corporate Social Responsibility (CSR) Associated with Tax Avoidance? Evidence from Irresponsible CSR Activities. The Accounting Review.Nov.2013. vol.88,No 6, pp2025-2059.

Hendrikse, G. (2003). Economics & Management of Organizations, McGraw-Hill Education, New York., USA.

Ilaboya, O.J., Izevbekhai, M.O. & Ohiokha, F.I. (2016). Tax planning and firm value: a review of literature. Business and Management Research 5(2), 81-91.

Jensen, M. & Meckling, W. (1976). Theory of the firm: managerial behaviour, agency costs & ownership structure‘, Journal of Financial Economics, 3 (4), 305-360.

Kiabel, B.D. & Nwokah, N.G. (2009). Curbing tax evasion and avoidance in personal income tax administration. European Journal of Economics, 15 (3). 16–61.

Lan, L. & Heracleous, L. (2010). Rethinking agency theory: the view from law. Academy Management Review, 35, (2), 294-314.

Lanis, R., McClure R., & Zirnsak, M. (2017). Tax aggressiveness of alcohol and bottling companies in Australia. Canberra: Foundation for Alcohol Research and Education. 1-32.

Mosota, J.R. (2014). The effect of tax avoidance on the financial performance of listed companies at the Nairobi securities exchange. Unpublished Master Thesis, Department of Business Administration, School of Business, University of Nairobi.

Loretz, S. and Moore, P.J. (2009). Corporate tax competition between firms., Nwaobia A.N, Jerry K.D and Ayodeji A. T (2015) Corporate Risk Management and Firms’ Value: Empirical evidence from selected Listed Manufacturing Companies in Nigeria.

Program on policy, Conflict & Strategic studies International Journal series 2(1).

Paper delivered at ICAN 2012 MCPE (Tax Practice Sector), Lagos, March 28 – 29.

Nnadi,A., M., & Akpomi, K. (2008). The effect of taxes on dividend policy of banks. International Research Journal of Finance and Economics,19(2):1450-2887.

Khaoula P. A. & Ayed, A. (2013). Tax planning and firm value: evidence from European companies. International journal of Economics and strategic management Business. 2nd International conference on Business, marketing and Management. Vol 4. No. 3; 2014 ISSN 1916-971X E-ISSN 1916-9728 Published by Canadian Center of Science and Education.

Moore, J.A. (2012). Empirical evidence on the impact of external monitoring on book–tax differences”, Advances in Accounting, incorporating Advances in International Accounting, 28, 254–269.

Huang, D.F., & Wang, C.L. (2013). Book-tax differences and earnings quality for the banking industry: evidence from Taiwan”, Pacific Accounting Review, 25 (2), 145 – 164

Jackson, M. (2009). Book-tax differences and earnings growth”, Working Paper, University of Oregon.

Hanlon, M. 2005. The persistence and pricing of earnings, accruals and cash flows when firms have large book tax differences. The Accounting Review 80 (1): 137–66.

Obinabo, C. R. (2016). Effect of tax evasion and avoidance on Nigeria economic growth. NG-Journal of Social Development 5 (4), 16-28.

Ohlson, J. (1995). Earnings, book value and dividend in security valuation. Contemporary Accounting Research 11(1), 661-687.

Zhang, C., Cheong, K. C., Rajah, R. (2016). Corporate Tax Avoidance and Performance: Evidence from China’s Listed Companies. Institutions and Economies Vol. 8, No. 3, July 2016, pp. 61-83.

Prendergast, C. (1999). The provision of incentives in firms. Journal of Economic Literature, 37 (1), 7-63.

Phillips, J. (2003). Corporate tax-planning effectiveness: the role of compensation- based incentives. The Accounting Review 78 (1), 847-874.

Jon N. K. (2012).The Real Effects of Opacity: Evidence from Tax Avoidance. Current Version: November 2012.

Ranatarisza, M. M. (2018). Whether book tax differences affect the price book value? RJOAS, 2(74), DOI

Redding, L. (1997). Firm size and dividend payouts. Journal of Financial Intermediation, 6 (2), 224-248.

Akanksha, J., Jayant, R. K., & Costanza M. (2016). Debt, Bankruptcy Risk, and Corporate Tax Aggressiveness. This version: December 24, 2016.

Rego, S. O. (2003). Tax-avoidance activities of U.S. multinational corporations. Contemporary Accounting Research 20 (4), 805-833.

Rego, S. & Wilson, R. (2012). Equity risk incentives and corporate tax aggressiveness. Journal of Accounting Research 50 (1), 775-810.

Sehrish, B., Zeeshan, A. K., & Bilal, N. (2013). Static Trade-off theory or Pecking order theory which one suits best to the financial sector: Evidence from Pakistan. European Journal of Business and Management ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.5, No.23, 2013 131

Salawu, R.O., Ogundipe, L.O. & Yeye,O. (2017). Granger causality between corporate tax planning and firm value of non-financial quoted companies in Nigeria. International Journal of Business and Social Science 8(9), 91-104.

Spence M. (1974), Market signaling: informational transfer in hiring and related processes, Cambridge: Harvard University Press.

Shleifer, A., & Vishny, R. (1986). Large shareholders monitoring and corporate control. Journal of Political Economy, 94(3), 461-488.

Sikes, S.A. & Verrecchia, R.E. (2016). Aggregate corporate tax avoidance and cost of capital. Paper presented at Indiana University Accounting Seminar, MIT Accounting Seminar, Ohio State University Accounting Seminar, Penn Tax Law and Policy Workshop, and the Tuck Finance, Economics and Accounting Seminar. 1- 39.

Sathaya, T. & Thatphong, A. (2019). The Effect of Tax Planning on Financial Performance in the Stock Exchange of Thailand. International Journal of Trade, Economics and Finance, 10(1).

Van Der Pilos, N. (2017). Tax avoidance and corporate governance does the board of directors influence tax avoidance? Unpublished MSc thesis, department of: Accounting, Auditing & Control, Erasmus School of Economics. 1 -39.

Wilson, R., (2009). An examination of corporate tax shelter participants. The Accounting Review 84 (3), 969–999.




How to Cite

Dr. Esra SIPAHI. (2020). Tax Plannıng and Fırm Value: An Empırıcal Analysıs of Consumer Goods Manufacturıng Companıes in Cyprus. SOCIALSCI JOURNAL, 6, 1-14. Retrieved from



Research Articles