Tax avoidance and corporate transparency on valuation of Philippine conglomerates and single-entities

• Main Authors: Fabico, Terri Arianne O., Ong, Jasmine Belle L., Sia, Janice H., Tan, Jasmine S.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Tax planning > Philippines; Taxation > Law and legislation > Philippines; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11411
• Institution: De La Salle University

Tax avoidance has been widely practiced by corporations to reduce the additional burden the government imposes so as to enhance firm value. However, the presence of agency problems may lead managers to cover rent extraction. To mitigate this conflict, corporate transparency plays an important role to determine the effect of which on the firm value. The study explored the extent of the difference in the level of tax avoidance and corporate transparency among conglomerates and single-entities. The impact of tax avoidance and corporate transparency on firm valuation were assessed in terms of the level of diversification. Based on our t-test results, the level of corporate transparency is significantly different between conglomerates and single-entities, while the level of tax avoidance does not differ. As to the diversification of industry, both measures have no significant effect on firm valuation. However, corporate transparency measures are found to have effects on firm value and to the number of industries. From the results of the study, this contributes to various users as there are factors that influence the valuation of shareholders wealth through the legitimacy of corporate disclosures.