1- Payame Noor University , m.tabatabaeian@pnu.ac.ir
2- Payame Noor University
2- Payame Noor University
Abstract: (16 Views)
The present study investigates the effect of tax avoidance and tax risk on corporate risk and examines the moderating role of tax risk in this relationship. Adopting a descriptive–analytical approach, the study uses panel data from 115 firms listed on the Tehran Stock Exchange during 2014–2023. To examine the research hypotheses, the static panel data regression model using the Ordinary Least Squares (OLS) estimation method was employed, with fixed effects chosen based on the Hausman test. The findings reveal that tax avoidance has a significant negative effect on corporate risk, indicating that higher levels of tax avoidance are associated with lower overall risk. Conversely, tax risk exerts a significant positive effect on corporate risk, showing that uncertainty in the tax environment increases corporate instability and financial risk. Furthermore, the interaction between tax avoidance and tax risk is positive and significant, implying that under high tax-risk conditions, the risk-reducing effect of tax avoidance weakens or reverses. From a theoretical perspective, these findings support the dual role of tax avoidance within the frameworks of agency theory and cost–benefit reasoning. From a scholarly standpoint, this study contributes to the literature by simultaneously integrating two key tax constructs—tax avoidance and tax risk—into a unified empirical model, offering a more comprehensive understanding of how tax-related decisions shape firm-level risk. Practically, the results provide valuable insights for managers, investors, and policymakers, highlighting that tax avoidance can serve as a strategic risk management tool only within transparent and stable institutional environments.
Send email to the article author
| Rights and permissions | |
 |
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. |
