Political Connection, Tax Avoidance, and Firm Value During Kabinet Kerja Reign: The Case in Jakarta Islamic Index

Authors

  • Versiandika Yudha Pratama IAIN Pekalongan, Indonesia

DOI:

https://doi.org/10.29040/jiei.v8i2.4844

Keywords:

Political Connection, Tax Avoidance, Firm Value, Jakarta Islamic Index

Abstract

This study aims to determine the effect of political connection on firm value through tax avoidance as a mediating variable on companies listed in the Jakarta Islamic Index during Kabinet Kerja reign. This research includes quantitative research and the data used are secondary data from the company's annual report. With the purposive sampling method, obtained 103 companies that are used as research samples. Path analysis test was used to analyze data and hypothesis test. The results of the study show that the political connection and tax avoidance partially or simultaneously affect the value of companies listed in the Jakarta Islamic Index during Kabinet Kerja reign. Meanwhile, the political connection has no effect on tax avoidance, so it can be ascertained that tax avoidance does not mediate (unmediated) the effect of political connection on firm value in companies listed on the Jakarta Islamic Index during Kabinet Kerja reign.

References

Adhikari, A., Derashid, C., & Zhang, H. (2006). Public Policy, Political Connection, and Effective Tax Rates: Longitudinal Evidence From Malaysia. Journal of Accounting and Public Policy, 25(5), 574–595.

Bandiyono, A. (2019). The Effect of Good Corporate Governance and Political Connection on Value Firm. Jurnal Akuntansi, 23(3), 333–348.

Baron, R. M., & Kenny, D. A. (1986). The Moderator–Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations. Journal of Personality and Social Psychology, 51(6), 1173.

Budiman, J. (2012). Pengaruh Karakter Eksekutif terhadap Penghindaran Pajak (Tax Avoidance) [PhD Thesis]. Universitas Gadjah Mada.

Butje, S., & Tjondro, E. (2014). Pengaruh Karakter Eksekutif dan Koneksi Politik Terhadap Tax Avoidance. Tax & Accounting Review, 4(2).

Chasbiandani, T., & Martani, D. (2012). Pengaruh Tax Avoidance Jangka Panjang terhadap Nilai erusahaan. Simposium Nasional Akuntansi XV, 90.

Christensen, D. M., Dhaliwal, D. S., Boivie, S., & Graffin, S. D. (2015). Top Management Conservatism and Corporate Risk Strategies: Evidence From Managers’ Personal Political Orientation and Corporate Tax Avoidance. Strategic Management Journal, 36(12), 1918–1938.

Coulomb, R., & Sangnier, M. (2014). The Impact of Political Majorities on Firm Value: Do Electoral Promises or Friendship Connections Matter? Journal of Public Economics, 115, 158–170.

Faccio, M. (2006). Politically Connected Firms. The American Economic Review, 96(1), 369–386.

Fisman, R. (2001). Estimating The Value of Political Connections. American Economic Review, 91(4), 1095–1102.

Hanlon, M., & Slemrod, J. (2009). What Does Tax Aggressiveness Signal? Evidence From Stock Price Reactions to News About Tax Shelter Involvement. Journal of Public Economics, 93(1–2), 126–141.

Ilmiani, A., & Sutrisno, C. R. (2015). Pengaruh Tax Avoidance Terhadap Nilai Perusahan Dengan Transparansi Perusahaan Sebagai Variabel Moderating. Jurnal Ekonomi Dan Bisnis, 14(1), 30–39.

Jensen, M. C. (1986). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers. The American Economic Review, 76(2), 323–329.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure. Journal of Financial Economics, 3(4), 305–360.

Kim, C., & Zhang, L. (2016). Corporate Political Connections and Tax Aggressiveness. Contemporary Accounting Research, 33(1), 78–114.

Lestari, G. A. W., & Putri, I. A. (2017). Pengaruh Corporate Governance, Koneksi Politik, dan Leverage Terhadap Penghindaran Pajak. E-Jurnal Akuntansi Universitas Udayana, 18(3), 2028–2054.

Maulana, A., & Wati, L. N. (2019). Pengaruh Koneksi Politik dan Struktur Kepemilikan Manajerial Terhadap Nilai Perusahaan. Jurnal Akuntansi, 8(1), 1–12.

Niessen, A., & Ruenzi, S. (2010). Political Connectedness and Firm Performance: Evidence from Germany. German Economic Review, 11(4), 441–464.

Panggabean, M. R. (2018). Pengaruh Corporate Social Responsibility, Ukuran Perusahaan, Struktur Modal Dan Tax Avoidance Terhadap Nilai Perusahaan. Kajian Bisnis Sekolah Tinggi Ilmu Ekonomi Widya Wiwaha, 26(1), 82–94.

Qouch-Anh, D., Lee, Y. T., & Nguyen, B. D. (2015). Political Connections and Firm Value: Evidence from the Regression Discontinuity Design of Close Gubernatorial Elections.

Utari, N. K. Y., & Supadmi, N. L. (2017). Pengaruh Corporate Governance, Profitabilitas dan Koneksi Politik pada Tax Avoidance. E-Jurnal Akuntansi Universitas Udayana, 18(2).

Wang, X. (2011). Tax Avoidance, Corporate Transparency, and Firm Value. American Accounting Association Annual Meeting-Tax Concurrent Sessions.

Wati, L. N., Rachmat Sudarsono, S. E., Si, M., & Erie Febrian, S. E. (2016). Corporate Governance on Conglomerates Pollitically Connected. International Journal of Business, Economics and Law, 10(1), 23–31.

Downloads

Published

24-06-2022

How to Cite

Pratama, V. Y. (2022). Political Connection, Tax Avoidance, and Firm Value During Kabinet Kerja Reign: The Case in Jakarta Islamic Index. Jurnal Ilmiah Ekonomi Islam, 8(2), 1311–1317. https://doi.org/10.29040/jiei.v8i2.4844

Issue

Vol. 8 No. 2 (2022): JIEI : Vol. 8, No. 2, 2022

Section

Articles

Citation Check

License

The copyright of the article fully belongs to the Jurnal Ilmiah Ekonomi Islam and publishing rights belong entirely to LPPM STIE AAS Surakarta

 Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Similar Articles

<< < 8 9 10 11 12 13 14 15 16 17 > >> 

You may also start an advanced similarity search for this article.