Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?

This paper investigates how tax benefits for companies affect future firm value and current corporate performance. In addition, this paper also examines the relationship between tax benefits and future firm value for each major industry. The findings of this paper are as follows. First, tax benefits...

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Autores principales:	Hyung-Jong Na, Hyeon Kang, Hyang-Eun Lee
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	tax benefits current corporate performance future firm value sustainability inherent taxation Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
Acceso en línea:	https://doaj.org/article/ab39c28ac57a45a689330c51cf50ae4c
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spelling	oai:doaj.org-article:ab39c28ac57a45a689330c51cf50ae4c2021-11-25T19:03:04ZDoes Tax Incentives Affect Future Firm Value for Corporate Sustainability?10.3390/su1322126652071-1050https://doaj.org/article/ab39c28ac57a45a689330c51cf50ae4c2021-11-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/22/12665https://doaj.org/toc/2071-1050This paper investigates how tax benefits for companies affect future firm value and current corporate performance. In addition, this paper also examines the relationship between tax benefits and future firm value for each major industry. The findings of this paper are as follows. First, tax benefits granted to companies improve current corporate performance. The effect of tax benefits that reduce corporate tax costs increases net income, which directly increases current corporate performance, such as ROA (returns on assets) and ROE (returns on equity). Second, tax benefits granted to firms reduce future firm value. Industries that receive tax benefits may have inherent taxation, which can lead to fiercer competition and ultimately lower pre-tax profit margins due to the entry of new companies or the increase in production facilities. In addition, tax benefits that cause temporary differences among the types of tax benefits for a company through deferred tax payments may be factors that hinder future improvements in corporate value. These causes result in the fact that tax benefits for a company can negatively affect its value in the long term. This paper has the following contributions. First, the findings of this paper imply that there is a limit to the positive impact of tax benefits on firms on improving corporate value in the long run. Second, through empirical analysis, this study provides objective information that the impact of tax incentives on corporate value may differ by industry.Hyung-Jong NaHyeon KangHyang-Eun LeeMDPI AGarticletax benefitscurrent corporate performancefuture firm valuesustainabilityinherent taxationEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 12665, p 12665 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	tax benefits current corporate performance future firm value sustainability inherent taxation Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350
spellingShingle	tax benefits current corporate performance future firm value sustainability inherent taxation Environmental effects of industries and plants TD194-195 Renewable energy sources TJ807-830 Environmental sciences GE1-350 Hyung-Jong Na Hyeon Kang Hyang-Eun Lee Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?
description	This paper investigates how tax benefits for companies affect future firm value and current corporate performance. In addition, this paper also examines the relationship between tax benefits and future firm value for each major industry. The findings of this paper are as follows. First, tax benefits granted to companies improve current corporate performance. The effect of tax benefits that reduce corporate tax costs increases net income, which directly increases current corporate performance, such as ROA (returns on assets) and ROE (returns on equity). Second, tax benefits granted to firms reduce future firm value. Industries that receive tax benefits may have inherent taxation, which can lead to fiercer competition and ultimately lower pre-tax profit margins due to the entry of new companies or the increase in production facilities. In addition, tax benefits that cause temporary differences among the types of tax benefits for a company through deferred tax payments may be factors that hinder future improvements in corporate value. These causes result in the fact that tax benefits for a company can negatively affect its value in the long term. This paper has the following contributions. First, the findings of this paper imply that there is a limit to the positive impact of tax benefits on firms on improving corporate value in the long run. Second, through empirical analysis, this study provides objective information that the impact of tax incentives on corporate value may differ by industry.
format	article
author	Hyung-Jong Na Hyeon Kang Hyang-Eun Lee
author_facet	Hyung-Jong Na Hyeon Kang Hyang-Eun Lee
author_sort	Hyung-Jong Na
title	Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?
title_short	Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?
title_full	Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?
title_fullStr	Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?
title_full_unstemmed	Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?
title_sort	does tax incentives affect future firm value for corporate sustainability?
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/ab39c28ac57a45a689330c51cf50ae4c
work_keys_str_mv	AT hyungjongna doestaxincentivesaffectfuturefirmvalueforcorporatesustainability AT hyeonkang doestaxincentivesaffectfuturefirmvalueforcorporatesustainability AT hyangeunlee doestaxincentivesaffectfuturefirmvalueforcorporatesustainability
_version_	1718410357749317632

Does Tax Incentives Affect Future Firm Value for Corporate Sustainability?

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