Purpose

This paper aims to study the impact of tax avoidance on corporate risk. It also examines the moderating impact of tax risk on the relationship between tax avoidance and firm risk.

Design/methodology/approach

Based on available information in the DATASTREAM database about a sample of French firms listed in the CAC 40 from 2010 to 2022, the study uses the feasible generalized least squares method to investigate the impact of tax avoidance on firm risk and the moderating impact of tax risk. To check the robustness of our results, the authors changed the measurement of variables to identify potential biases and they significantly mitigated the endogeneity concerns using instrumental variable regression. Additional estimations were performed, first by using book-tax differences (BTD) and its components, i.e. temporary and permanent, and second by retesting hypotheses of years before the outbreak of the corona virus disease 2019 (COVID-19) pandemic.

Findings

The results show that tax avoidance negatively affects the firm risk while tax risk has a positive effect on firm risk. More importantly, tax risk moderates the negative impact of tax avoidance on the firm risk. When tax avoidance is associated with a high level of tax risk, it leads to a high firm risk. Accordingly, tax avoidance should be considered in conjunction with tax risk when studying the effect put on the firm risk. Further analyses indicate that tax risk moderates the negative relationship between permanent BTD and firm risk.

Research limitations/implications

The major limitation of this study is that it focuses only on French-listed firms, which make it difficult to generalize the results. Furthermore, the authors did not introduce governance variables into our models. An effective governance system and transparent information can reduce some of the perverse effects of risky tax avoidance by reducing the tax avoidance costs. The obtained results are of great interest to researchers who need to include the tax risk concept in their examination of the tax avoidance impacts.

Practical implications

The results are useful for investors wishing to make sound decisions regarding risky tax avoidance practices. Furthermore, the results may signal the need for French policymakers to make more efforts to reduce risky tax avoidance activities that are harmful to investors. They must enforce the existence and the reporting of a tax risk management strategy by firms.

Originality/value

This study contributes to the growing body of literature on the tax avoidance effects with a special focus on firm risk. This study provides the first French evidence of the role of tax risk in the relationship between tax avoidance and firm risk.

中文翻译：

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税收风险对避税与企业风险之间关系的调节作用：法国背景下的经验证据

 目的

本文旨在研究避税对企业风险的影响。它还研究了税收风险对避税与公司风险之间关系的调节影响。

设计/方法论/途径

基于 DATASTREAM 数据库中 2010 年至 2022 年 CAC 40 上市法国公司样本的现有信息，该研究采用可行的广义最小二乘法来研究避税对公司风险的影响以及税务风险的调节影响。为了检查我们结果的稳健性，作者改变了变量的测量以识别潜在的偏差，并使用工具变量回归显着减轻了内生性问题。我们进行了额外的估计，首先使用账面税差 (BTD) 及其组成部分，即临时和永久的差额，其次通过重新检验 2019 年冠状病毒病 (COVID-19) 大流行爆发前几年的假设。

 发现

研究结果表明，避税对企业风险有负向影响，而税收风险对企业风险有正向影响。更重要的是，税收风险缓和了避税对企业风险的负面影响。当避税与高水平的税务风险相关时，就会导致高的公司风险。因此，在研究对企业风险的影响时，应将避税与税务风险结合起来考虑。进一步的分析表明，税收风险调节了永久 BTD 与公司风险之间的负相关关系。

研究局限性/影响

这项研究的主要局限性是它只关注法国上市公司，这使得结果很难推广。此外，作者没有将治理变量引入我们的模型中。有效的治理体系和透明的信息可以通过降低避税成本来减少风险避税的一些不利影响。所获得的结果引起了研究人员的极大兴趣，他们需要将税务风险概念纳入其避税影响的审查中。

 实际影响

研究结果对于希望就高风险避税行为做出明智决策的投资者很有用。此外，结果可能表明法国政策制定者需要做出更多努力，减少对投资者有害的高风险避税活动。他们必须强制公司制定税务风险管理策略并进行报告。

 原创性/价值

这项研究为越来越多的关于避税效应的文献做出了贡献，特别关注企业风险。这项研究首次提供了法国证据，证明税收风险在避税与企业风险之间的关系中的作用。