THE MODERATING EFFECT OF BOARD CHARACTERISTICS ON THE RELATIONSHIP BETWEEN TAX AVOIDANCE AND FIRM VALUE

Abstract

This study aims to analyze the effect of tax avoidance on firm value, with board characteristics serving as a moderating variable. It focuses on energy and basic materials companies listed on the Indonesia Stock Exchange during the 2021–2023 period and utilizes secondary data obtained from the official websites of the Indonesia Stock Exchange and the respective companies. The sample, consisting of 192 data points from 83 companies, was selected through purposive sampling and analyzed quantitatively using PLS-SEM with moderation analysis via the SmartPLS 4 software. To achieve the research objectives, board characteristics were measured using three key indicators: board size, board independence, and board meeting frequency. Tax avoidance and firm value were measured by the effective tax rate and Tobin’s Q, respectively. The findings of the study reveal that tax avoidance has a positive effect on firm value. Additionally, board size and board independence mitigate the effect of tax avoidance on firm value, while board meeting frequency amplifies the effect of tax avoidance on firm value.