Components of book tax differences, corporate social responsibility and equity value

This study examines the relationship between components of book-tax differences (BTD), corporate social responsibility (CSR) and market value of equity in Malaysia. The sources that impact BTD are unclear as previous studies incline to focus on aggregated BTD. By analysing the data of 373 Malaysian...

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Autores principales:	Tye Wei Ling, Nor Shaipah Abdul Wahab
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2019
Materias:	book tax differences corporate social responsibility equity value permanent differences statutory tax rates differences temporary differences Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/177c64b08a154240a071f448c2c3753d
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spelling	oai:doaj.org-article:177c64b08a154240a071f448c2c3753d2021-12-02T16:09:30ZComponents of book tax differences, corporate social responsibility and equity value2331-197510.1080/23311975.2019.1617024https://doaj.org/article/177c64b08a154240a071f448c2c3753d2019-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2019.1617024https://doaj.org/toc/2331-1975This study examines the relationship between components of book-tax differences (BTD), corporate social responsibility (CSR) and market value of equity in Malaysia. The sources that impact BTD are unclear as previous studies incline to focus on aggregated BTD. By analysing the data of 373 Malaysian non-financial public-listed companies from 2008 to 2015 using balanced-panel regression models, the findings provide evidence on shareholders’ valuation of permanent and temporary differences in the presence of CSR. Consistent with legitimacy theory, in which companies are theorised to conduct activities to appear legitimate in the eye of the shareholders, CSR is found to affect equity value positively. This suggests that the companies achieve their objectives to appear legitimate through CRS activities. As permanent differences and temporary differences imply the extent of companies’ tax planning activities through strategic and deferral tax planning, this study finds negative relationship between permanent differences and temporary differences, and equity value. This suggests that the shareholders are reluctant to incrementally value tax planning activities through permanent differences and temporary differences due to the activities’ inherent risk. In addition, this study finds shareholders simultaneously and positively value permanent and temporary differences, when CSR and the BTD components interact, suggesting that the strength of the initial relationships between permanent differences, temporary differences and equity value are depending on the company’s CSR engagement.Tye Wei LingNor Shaipah Abdul WahabTaylor & Francis Grouparticlebook tax differencescorporate social responsibilityequity valuepermanent differencesstatutory tax rates differencestemporary differencesBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 6, Iss 1 (2019)
institution	DOAJ
collection	DOAJ
language	EN
topic	book tax differences corporate social responsibility equity value permanent differences statutory tax rates differences temporary differences Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	book tax differences corporate social responsibility equity value permanent differences statutory tax rates differences temporary differences Business HF5001-6182 Management. Industrial management HD28-70 Tye Wei Ling Nor Shaipah Abdul Wahab Components of book tax differences, corporate social responsibility and equity value
description	This study examines the relationship between components of book-tax differences (BTD), corporate social responsibility (CSR) and market value of equity in Malaysia. The sources that impact BTD are unclear as previous studies incline to focus on aggregated BTD. By analysing the data of 373 Malaysian non-financial public-listed companies from 2008 to 2015 using balanced-panel regression models, the findings provide evidence on shareholders’ valuation of permanent and temporary differences in the presence of CSR. Consistent with legitimacy theory, in which companies are theorised to conduct activities to appear legitimate in the eye of the shareholders, CSR is found to affect equity value positively. This suggests that the companies achieve their objectives to appear legitimate through CRS activities. As permanent differences and temporary differences imply the extent of companies’ tax planning activities through strategic and deferral tax planning, this study finds negative relationship between permanent differences and temporary differences, and equity value. This suggests that the shareholders are reluctant to incrementally value tax planning activities through permanent differences and temporary differences due to the activities’ inherent risk. In addition, this study finds shareholders simultaneously and positively value permanent and temporary differences, when CSR and the BTD components interact, suggesting that the strength of the initial relationships between permanent differences, temporary differences and equity value are depending on the company’s CSR engagement.
format	article
author	Tye Wei Ling Nor Shaipah Abdul Wahab
author_facet	Tye Wei Ling Nor Shaipah Abdul Wahab
author_sort	Tye Wei Ling
title	Components of book tax differences, corporate social responsibility and equity value
title_short	Components of book tax differences, corporate social responsibility and equity value
title_full	Components of book tax differences, corporate social responsibility and equity value
title_fullStr	Components of book tax differences, corporate social responsibility and equity value
title_full_unstemmed	Components of book tax differences, corporate social responsibility and equity value
title_sort	components of book tax differences, corporate social responsibility and equity value
publisher	Taylor & Francis Group
publishDate	2019
url	https://doaj.org/article/177c64b08a154240a071f448c2c3753d
work_keys_str_mv	AT tyeweiling componentsofbooktaxdifferencescorporatesocialresponsibilityandequityvalue AT norshaipahabdulwahab componentsofbooktaxdifferencescorporatesocialresponsibilityandequityvalue
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Components of book tax differences, corporate social responsibility and equity value

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