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The purpose of our study is to investigate the effect of the dividend tax reform established by the Job Creation Act on corporate dividend behavior in a manner that increases firms’ dividends. We intend to test whether the rise in dividends following the new tax law is motivated by tax considerations.

Using the data from the Indonesian Stock Exchange (IDX) database and Bloomberg, we employ the difference-in-difference approach as our main strategy.

Our results are twofold. First, we find that firms pay higher dividends after the tax reform, despite facing sharp declines in financial performance caused by the pandemic crisis. Therefore, the dividend rise among Indonesian firms after the tax reform cannot be attributed to corporate profitability as suggested by several scholars who studied the effect of the dividend tax reform on corporate dividend behavior in the USA. Second, we find that firms pay dividends more frequently following the dividend tax reform. As a result, we confirm that our results are not driven by a few large payers, and there is a larger number of firms that are initiating or increasing dividends compared to those that are omitting or decreasing dividends.

We face two limitations in our paper. First, we do not separate the dividend payments into regular and special dividends as done by Chetty and Saez (2005) and Julio and Ikenberry (2004). Examining the response of the dividend tax reform separately between regular and special dividends allows for more valid inferences about whether the increase in dividend payments following the tax reform should be attributed to the change in firms’ dividend behavior in general or the sole effect of a few large firms that paid one-time and non-recurring dividends that drove the results. Second, we provide evidence that may be particularly unique to developing countries like Indonesia, where controlling shareholders predominantly stir corporate dividend decisions. Consequently, it is challenging to generalize our findings to other contexts where the legal and regulatory environments are distinct.

First, our findings provide evidence that the dividend rise after the tax reform is not attributable to corporate profitability, which has long been claimed by several scholars as a factor that influences the dividend rise post-reform rather than the dividend policy per se. Second, our results demonstrate that, despite the fact that controlling shareholders lack marginal incentives to increase dividend payments, the dividend tax reform can serve as a governance mechanism to safeguard minority shareholders in the absence of strong investor protection. Lastly, our findings provide evidence that the dividend tax policy can become the first-order determinant that shapes firms’ dividend decisions rather than firm-specific factors such as the pattern of past dividends and stability of earnings.

This is the first study that documents the effects of the reduction in tax penalty on corporate dividend behavior in Indonesia, where the dividend tax exemption is set to be permanently implemented.

In public firms, the largest shareholder can make decisions on cash dividends in favor of its own interests at the expense of other investors. While the second largest shareholder can actively participate in corporate governance and protect the interests of investors, its impact has not been fully understood. This research investigates how shareholding ratio and ownership type of the second largest shareholder moderate the relationship between controlling shareholder's shareholding ratio and cash dividends.

The authors conducted econometrics analysis based on a panel data of China's A-share listed companies from 2007 to 2017.

The authors find that the controlling shareholder's shareholding ratio has a significant negative impact on cash dividends. However, this influence is conditional on the shareholding ratio of the second largest shareholder. The negative impact is weakened when the second largest shareholder holds a large proportion of shares or when the shareholding gap between the second largest and the controlling shareholder is small.

This research extends the existing literature by highlighting the nuanced moderating effect of the second largest shareholder on the relationship between the controlling shareholder and cash dividends, thus making a unique contribution to the understanding of corporate governances in the emerging financial market in China.

This study aims to examine the financial investigation system in Ghana in relation to tax evasion and money laundering practices among multinational corporations (MNCs).

The study adopted the qualitative case study design. The population was 15 officials, comprising 14 highly qualified tax enforcement and anti-money laundering officers from key state agencies, as well as a tax consultant. The data was gathered using a semi-structured interview and analysed thematically.

The study found that there is an effective financial investigation system in Ghana that regulates tax evasion and money laundering practices among MNCs; however, more can be done to perfect the system. There is an effective collaboration among financial investigation agencies in terms of intelligence sharing, although it is often marred by bottlenecks and unnecessary bureaucracies. Finally, there was no consensus that the financial investigation system in Ghana has helped to prevent/retrieve the proceeds of tax evasion and money laundering among MNCs. The study concludes that Ghana’s financial investigation system is well-placed to deal with tax evasion and money laundering practices among MNCs. Notwithstanding, there is room for improvement.

This study only focused on the financial investigation system in Ghana in relation to tax evasion and money laundering practices among MNCs. It did not give attention to other entities, individuals or crimes.

The study offers an inside perspective into the financial investigation system in Ghana in relation to tax evasion and money laundering among MNCs. To the best of the authors’ knowledge, no study of this nature has been conducted in Ghana or elsewhere.

The main purpose of this study is to examine the effect of corporate digital transformation on bond credit spreads. Additionally, it also explores the two potential channels, information asymmetry and default risk, through which digital transformation can influence bond credit spreads.

We use the bond issuance data of Chinese listed companies over the period 2008–2020. Corporate digital transformation of these companies is measured with textual analysis of the management discussion and analysis part of annual reports. We employ a panel regression model to estimate the effect of digital transformation on bond credit spreads.

We find robust evidence that companies with higher digital transformation experience lower bond credit spreads. We further observe that credit spread reduction is higher for firms that are smaller, non-state-owned, have lower credit ratings and have less analyst coverage. We also find evidence that digital transformation reduces credit spreads by reducing the information asymmetry between firms and investors with enhanced information transformation mechanisms and lowering corporate default risk by strengthening operating efficiency.

To the best of our knowledge, this study is the first attempt to understand the impact of corporate digital transformation on bond credit spreads. Our findings help to understand the effect of digital transformation on firms’ credit worthiness and access to capital.

The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) disclosure and dividend policy of Islamic banks.

Annual reports from 29 Islamic banks in the GCC region are analyzed over the period 2010–2019. A CSR index was constructed to measure the extent of CSR disclosure.

The findings of this study indicate that CSR disclosure negatively impacts the dividend payout ratio (DPR) but boosts the likelihood of paying dividends. The mission and vision (MV) CSR sub-dimension reduces payouts, while zakah, charity and community commitment (ZCB and CTC) enhance dividend propensity. Results are robust across measures.

This research provides new insights into the interplay between CSR practices and dividend policies in Islamic banks, highlighting specific CSR dimensions that influence financial decisions.

This research investigates the moderating impact of independent directors on the relationship between tax avoidance and the key characteristics of the listed firms, namely profitability, company size and leverage in an emerging nation setting.

The generalised method of moments (GMM) technique, dynamic ordinary least squares and second-generation unit root test are used in this study. A long-term cointegration of the variables is supported by the Kao residual cointegration test.

The current study finds that a company’s profitability, firm size and independent directors have a considerable favourable impact on corporate tax avoidance. In addition, independent directors have a negative and significant moderating effect on the association between firm size, profitability and tax avoidance. This relationship implies that the presence of independent directors can lessen the tax avoidance practice of business firms.

Our findings highlight the importance of including independent directors to improve corporate governance, reduce tax avoidance and make better-informed investment decisions. It also highlights the role of policymakers and regulatory bodies in implementing laws, providing guidance and transparency and ensuring active shareholder engagement.

As far as the authors are aware, this is the first research conducted in Bangladesh to examine the influence of independent directors on a company’s likelihood of engaging in tax avoidance.

The purpose of this paper is to build on recent work by Love (2024) on how profit-shifting by multinational enterprises (MNEs) and tax competition leads to inequality and global injustice.

This paper outlines how different disciplines have analyzed the use of tax haven by MNEs. The authors discuss how these insights can lead to policy recommendations for global inequality and injustice from various complementary perspectives.

The authors identify three interesting issues: (1) how other disciplines have examined tax havens and inequality/injustice and what insights International Business (IB) could draw from these perspectives; (2) the potential policy roles of the OECD versus the UN in addressing the challenges posed by profit-shifting and tax competition; and (3) the benefits of integrating a philosophical approach to global justice into the IB literature, providing a more normative framework for understanding the implications of MNE activities.

This paper contributes to the increasing importance and ongoing debate regarding the MNEs influence on global inequality and injustice. It demonstrates how philosophical and ethical perspectives can complement and enrich existing IB perspectives in addressing the grand challenge of inequality across countries and the role that MNEs play via their tax haven strategies. The authors further suggest that cross-disciplinary approaches and methods are necessary to demystify the secrecy of tax havens and offer policy recommendations on how to alleviate global inequality and injustice.

This study examines the moderating role of female directors on the relationship between the firms’ characteristics and tax avoidance in an emerging economy.

This study employs the second-generation unit root test and the generalised method of moments (GMM) techniques. The Kao residual cointegration test corroborates a long-run cointegration among variables.

Female directors demonstrate mixed and unusual findings. No significant impact of female directors on tax avoidance is found. In addition, the presence of female directors does not show any negative or significant moderating impacts on the relationship between leverage, firm age, board size and tax avoidance. However, having more female directors can negatively and significantly moderate the relationship between more profitable firms, larger firms and tax avoidance. These findings show that the board of directors could use the presence of female directors to maximise their opportunistic behaviour, such as to avoid tax.

Research limitations – The study is limited by considering only 62 listed firms. The scope could be extended to include non-listed firms.

Research implications – There is increasing pressure for female directors on boards from diverse stakeholders, such as the European Commission, national governments, politicians, employer lobby groups, shareholders, and Fortune and Financial Times Stock Exchange (FTSE) rankings. This study provides input to decision-makers putting gender quota laws into practice. Our findings can help policy-makers adopt regulatory reforms to control tax avoidance practices and enhance organisational legitimacy. Policymakers can change their policy to include female directors up to the threshold suggested by the critical mass theory.

This is the first attempt in Bangladesh to explore the role of female directors in the relationship between the firms' characteristics and tax avoidance. The current study has significant ramifications for bringing gender diversity into practice as a component of good corporate governance.

This study investigates the determinants of the market capitalization of listed companies through evidence from an emerging country.

This research employs the system generalized method of moments for a dataset of 7,608 observations from 687 Vietnamese listed firms.

Our findings show that both external and internal factors affect market capitalization. Intellectual capital, sales growth, profit, leverage and crises are positively linked to market capitalization; meanwhile, foreign direct investment, inflation and gross domestic product negatively affect market capitalization. The negative effect of macrofactors reflects the fact that the macroeconomic environment can deteriorate investment values and then market capitalization. This implies that macroeconomic stability is very crucial for firms and financial stability. The COVID-19 and financial crisis have a moderating influence on market capitalization through sales growth, profitability and leverage. Unlike previous studies, we find that intellectual capital plays a very essential role regardless of whether there is a crisis or not. Therefore, firms should focus on intellectual capital to grow market capitalization sustainably.

This paper contributes to the literature of market capitalization by investigating the determinants of market capitalization with a joint assessment of the financial crisis and the COVID-19 pandemic, which have not yet been considered together in previous studies. It enriches the literature by investigating the moderating effect of COVID-19 and financial crisis on the relationships between some key determinants and market capitalization. Unlike previous studies, our study highlights the essential role of intellectual capital in enhancing market capitalization regardless of whether there is a crisis.

This study explores the relationship between US public firms’ dividend policies and CEO selection. Specifically, we examine the association between successor CEOs’ prior employment and firms’ payout policies around CEO turnover events.

Using Execucomp, we identify a sample of 1,021 S&P 1500 firms with CEO turnover events occurring from 2010 to 2016. We categorize successor CEOs by their prior position as a public insider (hired internally from the public firm), public outsider (hired from a different public firm) or private outsider (hired from a private firm). We investigate dividend policies around CEO turnovers using differences-in-means and probit analyses.

Firms that hired private CEOs were 11.0% less likely to have paid a dividend in the year prior to the CEO turnover. However, those firms that had paid a dividend in the prior year were 5.4% more likely to subsequently drop their dividend. This finding supports a distinct effect that is related to the successor CEOs’ prior experience managing private firms, rather than an “outsider” effect: payout policies of firms that hired public outsiders were no different from those that hired public insiders.

We show that public firms that hire private CEOs tend to have dividend policies similar to those of private firms. This evidence suggests that human capital developed at private firms is applied when CEOs transfer to public firms. We show that outsiders from public firms behave differently from outsiders from private firms, and we are the first to measure the frequency of each kind of CEO successor: public insiders, public outsiders and private outsiders. These findings suggest a method to indirectly study private firms using more readily available data from public firms led by private CEOs.