Determinants of the effective tax rate in the tourism sector. A dynamic Panel Data Model

Authors

  • José Moreno-Rojas
  • María Rosario González-Rodríguez University of Seville
  • Rosario Carmen Martín-Samper University of Seville

Keywords:

Effective Tax Rate, Asset composition, Firm size, Financial structure, Equity, Dynamic panel data, ROA

Abstract

This paper presents a dynamic model of the Effective Tax Rate (ETR) in the tourism sector. A dynamic model where the lagged endogenous variable ETR has been included as a regressor to identify the dynamic structure of the variable due to the existence of temporal adjustments between the short and long run in ETR payments has been estimated. The empirical analysis based on a panel data set over the 2008-2013 period explores the determinants of the ETR variable by using a Generalised Method of Moments (GMM) estimator controlling for heterogeneity in the tourism sector. The Arellano-Bond system GMM estimator has been used to estimate the model. The study seeks to shed light on the determinants of tax burden in the tourism sector covering the lack of studies on this topic

References

Adhikari, A., Derashid, C. & Zhang, H. (2006). Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia. Journal of Accounting and Public Policy, 25, 574-595.

Anderson, W., & C. Hsiao (1982). Formulation and Estimation of Dynamic Models using Panel Data. Journal of Econometrics, 18, 67-82.

Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58, 27-299.

Baltagi, B. (2008). Econometric Analysis of Panel Data. Chichester, UK: Wiley.

Blundell, A. & Bond, S. (1998). Initial Conditions and Moments Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87, 115-144.

Buijink, W., Janssen, B. & Schols, Y. (2002). Evidence of the effect of domicile on corporate average effective tax rates in the European Union. Journal of International Accounting, Auditing & Taxation, 11 (2), 115-130.

Calvé Pérez, J. L., Labatut Serer, G. & Molina Llopis, R. (2005). Variables económico-financieras que inciden sobre la presión fiscal Martínez y Álvarez, soportada por las empresas de reducida dimensión: efectos de la reforma fiscal de 1995 en las empresas de la Comunidad Valenciana. Revista Española de Financiación y Contabilidad, 127, 875-897.

Chen, S., Chen, X., Cheng, T. & Shevlin, T.J. (2010). Are family firms more tax aggressive than non-family firms? Journal of Financial Economics, 95, 41-61.

Collins, J. H. & Shackelford, D. A. (1995). Corporate Domicile and Average Effective Tax Rates: The Cases of Canada, Japan, the United Kingdom and the United States. International Tax and Public Finance, 2, 55-83.

Demsetz, M. (1983). The structure of ownership and the theory of the firm. Journal of Law and Economics, XXVI, 375-390.

Demsetz, M. & Lehn, K. (1985). The structure of corporate ownership: causes and consequences. Journal of Political Economy, 93 (6). 1155-1177.

Derashid, C. & Zhang, H. (2003). Efective tax rates and the “industrial policy” hypothesis: evidence from Malaysia. Journal of International Accounting, Auditing & Taxation, 12, 45-62.

Devereux, M. P. & Griffith, R. (1998). Taxes and the Location of Production: Evidence from a Panel of US Multinationals. Journal of Public Economics, 68, 335-367.

Dyreng, S. D., Hanlon, M. & Maydew, E. L. (2010). The effects of executives on corporate tax avoidance. The Accounting Review, 85 (4), 1163-1189.

Ernst & Young, (2012). Indicadores económicos de la industria hotelera española Año 2011. Ernst & Young, S.L.

Feeny, S., Gillmann, M. & Harris, M.N. (2006). Econometric Accounting of the Australian Corporate Tax Rates: A Firm Panel Example. Accounting Research Journal, 19 (1), 64-73.

Fernández Rodríguez, E. & Rubín Fernández, I. (2002). La medida de la presión fiscal en la Unión Europea a través de la información contable. Comunicación presentada al X Congreso de la Asociación Española de Profesores Universitarios de Contabilidad, Santiago de Compostela.

Fernández Rodríguez, E. (2004). Los factores condicionantes de la presión fiscal empresarial española a partir de la información contable. Especial mención a las decisiones financieras. Revista Española de Financiación y Contabilidad, 120, 125-159.

Fernández Rodríguez, E., Martínez Arias, A. & Álvarez García, S. (2004). El Tipo Impositivo contable y fiscal de las sociedades españolas a lo largo de la década de los noventa. Partida Doble, 153, 60-67.

Fernández Rodríguez, E., Martínez Arias, A. & Álvarez García. S. (2008). La presión fiscal por Impuesto sobre Sociedades en la Unión Europea. Documento de Trabajo, Fundación de las Cajas de Ahorro, 407.

Fernández Rodríguez, E. & Martínez Arias, A. (2009). Factores determinantes de la presión fiscal de las empresas cotizadas en Estados Unidos y la Unión Europea a partir de la información contable. VII Workshop de Investigación Empírica en Contabilidad Financiera, Cartagena.

Fernández Rodríguez, E. & Martínez Arias, A. (2011). Determinants of Effective Tax Rate: Evidence for USA and the EU. Intertax, 39 (8/9), 381-395.

Fonseca Díaz, A.R., Fernández Rodríguez, E. & Martínez Arias, A. (2011). Factores condicionantes de la presión fiscal de las entidades de crédito españolas, ¿existen diferencias entre bancos y cajas de ahorros? Revista Española de Financiación y Contabilidad, 151, 491-516.

Garrido Pulido, T. & Garrido Pulido, R. (2006). The fiscal pressure in the cooperative agrarian societies of the second degree: repercussion of the law 3/2002, by that the law is modified 2/1999 gives cooperative andalusian societies. Revesco, 88, 62-98.

Giannini, S. & Maggiulli, C. (2002). The effective tax rates in the EU Commission study on corporate taxation: Methodological aspects, main results and policy implications, Center for Economic Studies & IFO Institute for Economic Research, working paper 666.

Graham, J.R. (1996). Debt and the marginal tax rate. Journal of Financial Economics, 41, 41-73.

Gravelle, J. G. (1982). Effects of the 1981 Depreciation Revisions on the Taxation of Income from Business Capital. National Tax Journal, 35 (1), 1-20.

Guenther, D. A. (1994). Earnings management in response to corporate tax rate changes: Evidence from the 1986 Tax Reform Act. The Accounting Review, 69 (1), 230-243.

Gupta, S. & Newberry, K. (1992). Corporate Average Effective Tax Rates after the Tax Reform Act of 1986. Tax Notes, 55, 689-702.

Gupta, S. & Newberry, K. (1997). Determinants of the Variability in Corporate Effective Tax Rates: Evidence from Longitudinal Data. Journal of Accounting and Public Policy, 16 (1), 1-34.

Harris, M. & Feeny, S. (2003). Habit Persistence in Corporate Effective Tax Rates. Applied Economics, 35, 951-958.

Heshmati, A., Johansson, D., & Bjuggren, C. M. (2010). Effective corporate tax rates and the size distribution of firms. Journal of Industry, Competition and Trade, 10, 297-317.

Holland, K. (1998). Accounting policy choice: The relationship between corporate tax burdens and company size. Journal of Business Finance and Accounting, 25, 265–288.

Hsieh, Y.-C. (2013). The heterogeneous relation between firm size and corporate effective tax rates: Evidence from listed companies in China. Journal of Interdisciplinary Mathematics, 16 (4-5), 297-308.

Jacobs, O. H. & Spengel, C. (2000). Measurement and Development of the Effective Tax Burden of Companies. An Overview and International Comparison. International Tax Review, 28 (10), 334-351.

Janssen, B. & Buijink, W. (2000). Determinants of the Variability of Corporate Effective Tax Rates (ETRs): Evidence for the Netherland. MARC Working Paper MARC-WP/3/2000-08. Disponible en http://arno.unimaas.nl/show.cgi?fid=538 (consultado 24 de marzo de 2014).

Jensen, M.C. & Meckling, N.H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial of Economics, 3, 305-360.

Kim, K. A. & Limpaphayom, P. (1998). Taxes and Firm Size in Pacific-Basin Emerging Economies. Journal of International Accounting, Auditing & Taxation, 7, 47-68.

Kern, B. & Morris, M. (1992). Taxes and Firm Size: The Effects of Tax Legislation during the 1980s. The Journal of the American Taxation Association, 14 (1), 80-96.

Liu, X. & Cao, S. (2007). Determinants of Corporate Effective Tax Rates. Evidence from Listed Companies in China. The Chinese Economy, 40 (6), 49-67.

Manzon, G. B. & Smith, W. R. (1994). The Effect of the Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986 on the Distribution of Effective Tax Rates. Journal of Accounting and Public Policy, 13 (4), 349-362.

Martínez Arias, A., Fernández Rodríguez, E. & Álvarez García, S. (2001). La incidencia de la reforma del Impuesto sobre Sociedades según el tamaño de la empresa. Documentos, Instituto de Estudios Fiscales, 23.

Martínez Vargas, J. (2015). Del impuesto sobre beneficios devengado al pagado: una valoración del cálculo del tipo impositivo efectivo. Revista de Contabilidad, 18 (1), 68-77.

McGuire, S. T., Omer, T. C. & Wang, D. (2012). Tax avoidance: does tax-specific industry expertise make a difference? The Accounting Review, 87 (3), 975-1003.

Mills, L., , E. L. (1998). Investments in Tax Planning. The Journal of the American Taxation Association, 20 (1), 1-20.

Molina Llopis, R. (2005). Presión fiscal en las pymes. Estudio de su incidencia en la Comunidad Valenciana. Monografías AECA. Asociación Española de Contabilidad y Administración de Empresas. Madrid.

Molina Llopis, R. (2012). La presión fiscal en las cooperativas españolas durante el período 2003-2008. CIRIEC-España, Revista de Economía Pública, Social y Cooperativa, 74, 39-58.

Molloy, K. H. (1998). An Approach for Comparing U.S. and Japanese Effective Corporate Tax Rates. Journal of International Accounting, Auditing & Taxation, 7 (1), 69-80.

Monterrey Mayoral, J. & Sánchez Segura, A. (2010). Diferencias en agresividad fiscal entre empresas familiares y no familiares. Revista Española de Financiación y Contabilidad, 145, 65-98.

Nicodeme, G. (2001). Computing effective corporate tax rates: comparisons and results. European Commission. Economic Paper ECFIN E2/358/01-EN, 153.

Omer, T. C., Molloy, K. & Ziebart, D. (1993). An Investigation of the Firm Size-Effective Tax Rate Relation in the 1980s. Journal of Accounting, Auditing and Finance, 8 (2), 167-182.

Plesko, G. A. (2003). An evaluation of alternative measures of corporate tax rates. Journal of Accounting and Economics, 35, 201-226.

Porcano, T. M. (1986). Corporate Tax Rates: Progressive, Proportional or Regresive. The Journal of the American Taxation Association, 7 (2), 17-31.

Richardson, G. & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of Accounting and Public Policy, 26, 689-704.

Sargan, J.D. (1958). The Estimation of Economic Relationships using Instrumental Variables. Econometrica, 26, 393-415.

Shevlin, T. & Porter, S. (1992). The corporate tax comeback in 1987: some further evidence. Journal of the American Taxation Association, 14 (1), 58-79.

Sholes, M. S. & Wolfson, M A. (1992). Firms’ responses to anticipated reductions in tax rates: The Tax Reform Act of 1986. Journal of Accounting Research, 30 (3), 161-185.

Stickney, C. P. & McGee, V. E. (1982). Effective Corporate Tax Rates. The Effect of Size, Capital Intensity, Leverage and Other Factors. Journal of Accounting and Public Policy, 1, 125-152.

Tran, A. V. (1997). The gap between accounting profit and taxable income. Australian Tax Forum, 13 (4), 507–534.

Tran, A.V. (1998). Causes of the book-tax income gap. Australian Tax Forum, 14 (3), 253–286.

Wang, S. (1991). The Relation Between Firm Size and Effective Tax Rates: A Test of Firm Political Success. Accounting Review, 66 (1), 158-169.

Wilkie, P. J., Limberg, S. (1990). The relationship between firm size and effective tax rate: A reconciliation of Zimmerman (1983) and Porcano (1986). The Journal of the American Taxation Association, 11, 76–91.

Wilkie, P. J. & Limberg, S. (1993). Measuring Explicit Tax (Dis) Advantage for Corporate Tax Payers: An Alternative to Average Effective Tax Rates. The Journal of the American Taxation Association, 15 (1), 46-71.

Wilkinson, B., Steven, C. & Geoff, J. (2001). Strategies and dividend imputation: the effect of foreign and domestic ownership on average effective tax rate. Journal of International Accounting, Auditing & Taxation, 10, 157-175.

Wu, L., Wang, Y., Luo, W. & Gillis, P. (2012). State ownership, tax status and size effect of effective tax rate in China. Accounting & Business Research, 42 (2), 97-114.

Zimmerman, J. L. (1983). Taxes and firm size. Journal of Accounting and Economics, 5 (2), 119-149.

Downloads

Published

08.01.2024

Issue

Section

Tourism/Hospitality: Research Papers

How to Cite

Determinants of the effective tax rate in the tourism sector. A dynamic Panel Data Model. (2024). Tourism & Management Studies, 13(3), 31-38. https://www.tmstudies.net/index.php/ectms/article/view/937

Most read articles by the same author(s)

1 2 3 4 5 6 7 8 9 10 > >>