Empirical study towards the drivers of effective corporate tax rate

This paper examines the drivers of effective corporate tax rate (ECTR) for a sample of S&P 500 companies, 2000-2014. The research covers variables towards firm characteristics, audit fees, and corporate governance. Based on generalised least square estimations, we provide evidence for a positive impact of capital intensity, debt to equity ratio, equity multiplier, return on equity, and CEO stock awards, on ECTR.

Contrariwise, we document the drivers showing a negative influence on ECTR, namely inventory intensity, debt to assets ratio, long-term debt to assets ratio, research and development intensity, current ratio, return on invested capital, and CEO salary. Nevertheless, robust specifications support not only the positive impact of capital intensity, but also of inventory intensity and CEO annual bonus, whereas the negative drivers consist of CEO stock awards apart from long-term debt to assets ratio, research and development intensity, current ratio, CEO salary.

Cited as:

Onofrei, M., Vintilă, G., Gherghina, Ş.C.,Păunescu R.,A., (2016). Empirical study towards the drivers of effective corporate tax rate, Transformations in Business & Economics (TIBE), Vol. 15, Nr.3C (39C), pp. 413-430,2016, pg. 18, ISSN: 1648-4460, journal indexed on international databases: ISI Web of Science (& Master Journal List) (Impact Factor 2016: 0,556, 5-Year Impact Factor: 0,526, Article Influence Score 2016:0,043, Business: 111/121 Q4, Economics: 261/347 Q4), Social Sciences Citation Index, Social SciSearch, Journal Citation Reports/Social Sciences Edition, EBSCO (EconLit with Full Text), IBSS, EconLit, e- JEL, JEL on CD, SCOPUS, Cabell’s Directory

http://www.transformations.knf.vu.lt/39c/article/empi