재무적 제약과 조세회피

초록

Given that financially constrained firms struggle to access external funding and accordingly have high borrowing costs, these firms will search for new sources of internal funds. This paper investigates the association between financial constraints and one significant source of internal funds available to firms - cash savings from tax avoidance. Considering the economic conditions that affect all firms simultaneously, we also analyse the association by dividing the sample period before and after the 1997 Asian financial crisis. Assuming the cost of implementing tax avoidance strategies does not increase for financially constrained firms, these firms will increase tax avoidance as access to external funds becomes more costly. Measuring financial constraints based on firm-specific measures (a financial distress indicator based on K-score, KZ-index, and the score of firms’ financial condition), we find that firms facing financial constraints exhibit lower cash effective tax rates. This suggest that financially constrained firms increase tax avoidance to generate cash savings. Dividing the sample period, the positive association between financial constraints and tax avoidance are strengthened after the financial crisis. We also find that firms’ characteristics influence the association between financial constraints and tax avoidance. Firms that decreased investment expenditures and firms that have more investment opportunity appear to avoid more taxes.

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