International Journal of Organizational Behavior and Policy

Impact of Tax Avoidance on Firm Value and Cost of Debt: Evidence from Indonesia

2026-02-25T14:06:04+07:00

This research aims to evaluate the impact of tax avoidance on both firm value and cost of debt for firms and diverse businesses. In performing its functions and duties, this paper will apply hypothesis testing methods, starting from a total of two hypotheses. The sample used involves 803 non-financial firms listed on the IDX during the period from 2021 to 2024, which amounts to a total of 3,212 observations. The findings vary across the sectors, which is partially inconsistent with the initial hypotheses that tax avoidance affects firm value and the cost of debt negatively. Regarding its effect on firm value, tax avoidance has a positive impact in the healthcare sector, but a negative impact on the consumer staples and utilities sectors. Meanwhile, for the cost of debt, tax avoidance shows a positive effect in the industrial and material sector, but a negative impact on the real estate and utilities sector. This research contributes to practice by helping companies design their tax avoidance strategies and by providing investors with insights into their investment decisions.

Tax Avoidance, Hidden Behind Corporate Social Responsibility: Moderating Role of Economic Freedom

2026-02-26T14:52:47+07:00

The purpose of this study is to examine whether Economic Freedom (EF) moderates the effect of Corporate Social Responsibility (CSR) on Tax Avoidance (TA). Using a panel of 285 listed firms from Indonesia, Australia, Singapore, the United States, and China over the period 2019–2023, we estimate multivariate regression models in which TA is proxied by the Effective Tax Rate (ETR) and the Cash Effective Tax Rate (CETR), CSR is proxied by the ESG Score, and EF is measured by the Heritage Economic Freedom Index. The empirical results show that higher CSR is associated with lower TA when TA is measured by ETR, while the interaction between CSR and EF is statistically insignificant across both TA measures. These findings suggest that CSR is generally consistent with lower tax avoidance, but that the moderating role of EF is weaker than expected in the post‑COVID‑19 period. The study contributes to the CSR–tax literature by incorporating a multi‑country post‑pandemic setting and by clarifying that EF does not systematically strengthen the CSR–TA relationship, thereby nuancing prior evidence on institutional moderators. Our results also offer policy and managerial implications for aligning CSR practices with transparent and responsible tax behaviour in different institutional environments.

Factors Influencing Individual Tax Compliance in Surabaya

2026-02-25T14:07:19+07:00

Under Indonesia’s self-assessment tax system, individual taxpayers are entrusted with primary responsibility for determining and fulfilling their tax obligations, making voluntary compliance a critical issue in tax administration. This study investigates the extent to which tax knowledge and tax awareness shape individual taxpayer compliance in Surabaya. Drawing on survey data collected from 202 registered individual taxpayers (NPWP holders), the analysis employs multiple linear regression to examine the proposed relationships. The findings demonstrate that tax knowledge plays a significant role in enhancing compliance by improving taxpayers’ capacity to understand tax regulations and procedural requirements. In addition, tax awareness is found to exert a positive influence on compliance, indicating that internalized responsibility and personal commitment to tax obligations are central to compliant behavior. Taken together, these results suggest that individual tax compliance in Surabaya is driven more strongly by internal motivation than by reliance on enforcement mechanisms. By emphasizing the psychological and behavioral foundations of compliance, this study contributes to the growing literature on voluntary tax compliance and offers practical implications for tax authorities, particularly the importance of education and awareness-oriented strategies in fostering sustainable taxpayer compliance.

The Effect of Environmental, Social, and Governance Performance on Firm Value with Proper Rating as A Moderating Variable

2026-02-25T14:07:52+07:00

Using the PROPER rating as a moderating variable, this research examines the effects of environmental, social, and governance (ESG) performance on firm value using panel data from non-financial corporations listed on the Indonesia Stock Exchange (IDX) between 2019 and 2023. The model was chosen using the The Chow, Breusch-Pagan, and Hausman tests, and the findings demonstrated that the pooled ordinary least squares (OLS) model is the most accurate specification. According to the results, neither ESG performance nor PROPER ratings have a big impact on a firm value. Nevertheless, the link between ESG and PROPER is significantly and adversely impacted, demonstrating that the impact of ESG on business value diminishes with increasing levels of verified environmental performance. The model's explanatory capacity is enhanced by including the interaction variable. According to these findings, the alignment of ESG disclosures with actual environmental performance has a greater impact on firm value in Indonesia than either PROPER or ESG alone. In order to ensure that ESG reporting and accredited environmental practices are consistent, businesses are urged to improve the integration of ESG reporting with the PROPER assessment system, while authorities are urged to do the same.

Domestic and Foreign Institutional Ownership and Sustainable Tax Strategies

2026-02-25T14:08:22+07:00

This study aims to explore how institutional domestic and foreign ownership influence sustainable tax strategies (STS) in firms. This research implements Weighted Least Square (WLS) regression as an analytical tool with a final sample of 767 observation for period of 2015 - 2020. There are 158 manufacturing firms listed in Indonesia Stock Exchange (IDX) used as objects in study. Findings in the study show that domestic and foreign ownership structure have impact on STS. This indicated that increases in domestic and foreign ownership within the firms, would lead to a further decrease in the volatility of long-term tax payments. Based on the results of the empirical tests, domestic and foreign ownership were found to influence the enhancement of STS. However, our findings indicated that domestic ownership exhibited a stronger relationship with STS than foreign ownership. This study provided recent evidence that both domestic and foreign ownership within a firm affected the implementation of STS. These findings were expected to imply that firms with higher levels of foreign ownership should be aware of and exercise caution regarding differences in preferences between foreign and domestic owners. Foreign-owned companies are obligated to follow not only domestic tax laws but also foreign tax laws.