Tax Avoidance and Firm Value: Moderating Role of Intellectual Capital

Abstract

The market response can be caused by information submitted by the company to the public. It is related to the company's market performance which is not necessarily in line with its operating performance. Certain management policies identified through financial reports can encourage a positive market response. This study investigates the effect of tax avoidance on the firm value by using intellectual capital as a moderating variable. The data used in this research is sourced from www.idnfinancials.com and www.idx.co.id, using data on financial statements and share prices of financial sector firms in the banking sub-sector listed on the Indonesia Stock Exchange for the period 2018 to 2021. This study employs a purposive sampling approach to use the total sample for 128 observations. The test result suggests that tax avoidance is negatively associated with firm value. Also, this study finds that intellectual capital weakens the negative effect of tax avoidance on the firm value.