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Eurasian Business Review
Published in: Eurasian Business Review 3/2018

08-06-2017 | Original Paper

The association between competition power in markets and tax avoidance: evidence from Tehran stock exchange

Authors: Behnam Karamshahi, Zeinab Azami, Tabandeh Salehi

Published in: Eurasian Business Review | Issue 3/2018

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Abstract

The current research aimed at studying the association between the power of competition in markets and tax avoidance in the companies complied with Tehran stock exchange. To evaluate competition power in the markets, 2 variables are used, namely, Herfindahl-Hirschman Index (HHI) and entrance obstacles. The dependent variables in this paper were effective tax rate (ETR) and adjusted non-taxable income. The research sample included 72 companies listed on Tehran Stock Exchange during 2006–2015. To assess the research hypotheses, a multi-variable regression was utilized. The research findings revealed a negative relationship between HHI and the ratio of entrance obstacles on the one hand and ETR on the other hand. Thus, the higher the power of competition in a company was, the more the tax avoidance was found. Also, a significant association was observed between HHI and the adjusted non-taxable income. Finally, no significant relationship was seen between the entrance obstacles and adjusted non-taxable incomes.
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Metadata
Title
The association between competition power in markets and tax avoidance: evidence from Tehran stock exchange
Authors
Behnam Karamshahi
Zeinab Azami
Tabandeh Salehi
Publication date
08-06-2017
Publisher
Springer International Publishing
Published in
Eurasian Business Review / Issue 3/2018
Print ISSN: 1309-4297
Electronic ISSN: 2147-4281
DOI
https://doi.org/10.1007/s40821-017-0082-8

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