Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector
Yıl: 2022 Cilt: 51 Sayı: 2 Sayfa Aralığı: 563 - 581 Metin Dili: İngilizce DOI: 10.26650/ibr.2022.51.995585 İndeks Tarihi: 06-05-2023
Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector
Öz: Tax planning, which has an important place in financial planning, is the systematic way of avoiding tax in accordance with the laws. In this process, R&D expenditures constitute a tax shield for firms to decrease their tax base. The purpose of this study is to examine whether tax planning affects R&D expenditures. The sample includes 564 firm-year observations over the period 2008-2019 for listed firms operating in the BIST-Manufacturing sector and spending R&D. As the past values of R&D expenditures have an effect on current period expenditures, the dynamic relationship between variables was analyzed by the Generalized Method of Moments (GMM) and System GMM. The findings show that tax planning has a positive effect on R&D expenditures. However, the change in firm size negatively affects R&D expenditures. The study focuses only on certain firms listed in the BIST-Manufacturing sector that made R&D and hence the results might have a limited explanatory capacity for the other sectors. Nevertheless, the findings highlight the need for firms to establish units to carry out tax planning practices that can reduce the tax burden through various means, especially R&D incentives.
Anahtar Kelime: Belge Türü: Makale Makale Türü: Araştırma Makalesi Erişim Türü: Erişime Açık
- Amadasun, A. B., & Igbinosa, S. O. (2011). Strategies for effective tax planning. Franklin Business & Law Journal, (2), 51-64.
- Anderson, T. W., & Rubin, H. (1950). The asymptotic properties of estimates of the parameters of single equation in a complete system of stochastic equations. Annals of Mathematical Statistics, 21(4), 570-582. https://doi.org/10.1214/aoms/1177729752
- Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297. https://doi. org/10.2307/2297968
- Arellano, M., & Bover, O. (1995). Another look at the instrumental variables estimation of error components models. Journal of Econometrics, (68), 29-51. https://doi.org/10.1016/0304-4076(94)01642-D
- Armstrong, C. S., Blouin, J. L., & Larcker, D. F. (2012). The incentives for tax planning. Journal of Accounting and Economics, 53(1-2), 391-411. https://doi.org/10.1016/j.jacceco.2011.04.001
- Baltagi, B. H. (2014). Econometric analysis of panel data. John Wiley.
- Blouin, J. (2014). Defining and measuring tax planning aggressiveness. National Tax Journal, 67(4), 875- 900. https://dx.doi.org/10.17310/ntj.2014.4.06
- Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, (87), 11-143. https://doi.org/10.1016/S0304-4076(98)00009-8
- Chen, M. C., Chang, C. W., & Lee, M. C. (2020). The effect of chief financial officers’ accounting expertise on corporate tax avoidance: The role of compensation design. Review of Quantitative Finance and Accounting, 54, 37-296. https://doi.org/10.1007/s11156-019-00789-5
- Cheng, C. S. A., Guo, P., Weng, C. H., & Wu, Q. (2021). Innovation and corporate tax planning: The distinct effect of patents and R&D. Contemporary Accounting Research, 38 (1), 621-653. https://doi. org/10.1111/1911-3846.12613
- Çağlayan Akay, E. (2018). Dinamik panel veri modelleri [Dynamic panel data models]. In S. Güriş (Ed.), Uygulamalı panel veri ekonometrisi [Applied panel data econometrics]. (pp.105-132). İstanbul, Turkey: Der Publishing.
- Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2008). Long-run corporate tax avoidance. The Accounting Review, 83(1), 61-82. https://doi.org/10.2308/accr.2008.83.1.61
- Eicke, R. (2008). Tax planning with holding companies repatriation of US profits from Europe: Concepts, strategies, structures. Eucoteax Wolters Kluwer Law & Business International.
- Elschner, C., & Ernst, C. (2008). The impact of R&D tax incentives on R&D costs and income tax burden. ZEW Discussion Papers, (08-124). Retrieved from https://www.econstor.eu/handle/10419/27607
- Ernst & Young (2019). Worldwide R&D incentives reference guide. Retrieved from https://www.ey.com/ en_gl/tax-guides/worldwide-r-and-d-incentives-reference-guide-2020
- Ernst, C., & Spengel, C. (2011). Taxation, R&D tax incentives and patent application in Europe. ZEW Discussion Paper, (11-024). Retrieved from ftp://ftp.zew.de/pub/zew-docs/dp/dp11024.pdf
- Fagbemi T.O., Olaniyi T.A., & Ogundipe A.A. (2019). The corporate tax planning and financial performance of systemically important banks in Nigeria. Ekonomski Horizonti, 21(1), 15-28. https://doi.org/10.5937/ ekonhor1901015F
- Feige, E. L. (1989). The underground economies: Tax evasion and information distortion. Cambridge University Press. https://doi.org/10.1017/CBO9780511571749
- Frank, M.M., Lynch, J.L., & Rego, S.O. (2009). Are financial and tax reporting aggressiveness reflective of broader corporate policies?. The Accounting Review, 84(2), 467-496. http://dx.doi.org/10.2139/ ssrn.647604
- Ftouhi, K., & Ghardallou, W. (2020). International tax planning techniques: A review of the literature. Journal of Applied Accounting Research, 21(2), 329-343. https://doi.org/10.1108/JAAR-05-2019-0080
- Garbarino, C. (2011). Aggressive tax strategies and corporate tax governance: An institutional approach. European Company and Financial Review, 8(3), 277-304. https://doi.org/10.1515/ecfr.2011.277
- Gayatri, N. S., & Wirasedana, I. W. (2021). The influence of tax planning, company size, and cash holding on earnings management in the infrastructure, utilities and transportation sectors. American Journal of Humanities and Social Sciences Research, 5 (2), 261-267.
- Göçer, İ., Kutbay, H., Gerede, C., & Aslan, R. (2014). Vergi teşviklerinin Ar-Ge ve inovasyona etkisi: Panel eşbütünleşme ve nedensellik analizi [Effects of tax incentives on R&D and innovation: Panel cointegration and causality analysis]. Maliye Dergisi, (167), 163-183.
- Grabińska, B., & Grabiński, K. (2017). The impact of R&D expenditures on earnings management. Argumenta Oeconomica Cracoviensia, (17), 53-72. https://doi.org/10.15678/AOC.2017.1704
- Graham, J.R., & Tucker, A. (2006). Tax shelter and corporate debt policy. Journal of Financial Economics, 81(3), 563-594. https://doi.org/10.1016/j.jfineco.2005.09.002
- Graham, J. R., Hanlon, M., Shevlin, T., & Shroff, N. (2014). Incentives for tax planning and avoidance: Evidence from the field. The Accounting Review, 89(3), 991-1023. https://doi.org/10.2308/accr-50678
- Graham, J.R., Raedy, J., & Shackelford, D. (2012). Research in accounting for income taxes. Journal of Accounting and Economics, 53(1-2), 412-434. https://doi.org/10.1016/j.jacceco.2011.11.006
- Hanlon, M., & Shevlin, T. (2002). The tax benefits of employee stock options: The accounting and implications. Accounting Horizons, 16(1), 1-16. https://doi.org/10.2308/acch.2002.16.1.1
- Hodžić, S. (2013). Tax incentives for research and development in Austria and Croatia: B-index. Economic Thought and Practice, (2), 397-416.
- Hoffman, W.H. (1961). The theory of tax planning. The Accounting Review, 36(2), 274-281. http://www.jstor. org/stable/243232.
- Huang, W., Ying, T., & Shen, Y. (2018). Executive cash compensation and tax aggressiveness of Chinese firms. Review of Quantitative Finance and Accounting, (51), 1151-1180. https://doi.org/10.1007/s11156- 018-0700-2
- Hughes, K. (1988). The interpretation and measurement of R&D intensity-a note. Research Policy, (17), 301- 307. https://doi.org/10.1016/0048-7333(88)90010-8
- Hwang, J., & Sun, Y. (2018). Should we go one step further? An accurate comparison of one-step and twostep procedures in a generalized method of moments framework. Journal of Econometrics, 207(2), 381- 405. https://doi.org/10.1016/j.jeconom.2018.07.006
- İbiş, C. (2004). İşletmelerde vergi planlaması [Tax planning in businesses]. Mali Çözüm Dergisi, (68), 72-79.
- Kahriman, H., Mastar Özcan, P., & Tepekule, U. (2015). İşletmelerde uluslararası vergi planlaması [International tax planning in businesses]. I. International Congress on Economics and Business, Gostivar-Macedonia, 164-175.
- Kirchler, E., Maciejovsky, B., & Schneider, F. (2003). Everyday representations on tax avoidance, tax evasion, and tax flight: Do legal differences matter?. Journal of Economic Psychology, 24(4), 535-553. https:// doi.org/10.1016/S0167-4870(02)00164-2
- Lanis, R., & Richardson, G. (2011). The effect of board of director composition on corporate tax aggressiveness. Journal of Accounting and Public Policy, 30(1), 50-70. https://doi.org/10.1016/j.jaccpubpol.2010.09.003
- Lynch, D. (2014). Investing in the corporate tax function: The effects of remediating material weaknesses in internal control on tax avoidance (Doctoral Dissertation, Michigan State University). Retrieced from https://d. lib.msu.edu/etd/2516.
- Nar, M. (2015). Vergi planlaması aracı olarak Ar-Ge harcamaları [R&D expenditures as a tool for tax planning]. Uluslararası Sosyal Araştırmalar Dergisi, 8(37), 925-940.
- Neuman, S. S. (2014). Effective tax strategies: It’s not just minimization (Doctoral Dissertation, University of Missouri). Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2496994.
- OECD (2020). Main science and technology indicators. 2019(2). OECD Publishing. Retrieved from https:// data.oecd.org/rd/gross-domestic-spending-on-r-d.htm
- OECD. (2013). Aggressive tax planning based on after-tax hedging. OECD. 2015, Retrieved from https://www. oecd.org/tax/aggressive/after_tax_hedging_report.pdf.
- Olurankinse, F., & Mamidu, A. I. (2021). Corporate tax planning and financial performance of development banks in Nigeria. European Journal of Accounting, Auditing and Finance Research, 9 (5), 53-72. Retrieved from https://ssrn.com/abstract=3896368
- Peker, İ., & Kılıçer, E. (2017). Vergi planlaması ve işletmeleri vergi planlaması yapmaya yöneltebilecek uygulamalar [Tax planning and applications that may lead businesses to tax planning]. Akademik Bakış Uluslararası Sosyal Bilimler E-Dergisi, (61), 900-911.
- Rego, S.O. (2003). Tax-avoidance activities of U.S. multinational corporations. Contemporary Accounting Research, 20(4), 805-833. https://doi.org/10.1506/VANN-B7UB-GMFA-9E6W
- Rezaee, Z. (2005). Causes, consequences, and deterrence of financial statement fraud. Critical Perspectives on Accounting, 16(3), 277-298. https://doi.org/10.1016/S1045-2354(03)00072-8
- Roodman, D. (2009). A Note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics 71(1), 135-158. https://doi.org/10.1111/j.1468-0084.2008.00542.x
- Slemrod, J. (2004). The Economics of corporate tax selfishness. National Tax Journal, 57(4), 877-899. https:// dx.doi.org/10.17310/ntj.2004.4.06
- Sterlacchini, A., & Venturini, F. (2019). R&D tax incentives in EU countries: Does the impact vary with firm size?. Small Business Economics, 53(3), 687-708. https://doi.org/10.1007/s11187-018-0074-9
- Stickney, C., & McGee, V. (1982). Effective corporate tax rates: The effect of size, capital intensity, leverage, and other factors. Journal of Accounting and Public Policy, 1(2), 125-152. https://doi.org/10.1016/S0278- 4254(82)80004-5
- Şen S. (2020). İleri demokrasilerde politik bütçe dalgalanmaları ortaya çıkar mı? [Do political budget cycles exist in advanced democracies?]. Gümüşhane Üniversitesi Sosyal Bilimler Enstitüsü Elektronik Dergisi, 11(3), 728-743. Retrieved from https://dergipark.org.tr/tr/pub/gumus/issue/57505/666968.
- Taşkın, Y., & Peker, İ. (2019). Vergi planlaması: Muhasebe meslek mensupları üzerine bir alan araştırması [Tax planning: A field research on accounting professionals]. Mali Çözüm Dergisi, 29(153), 67-87.
- Taylor, G., & Richardson, G. (2014). Incentives for corporate tax planning and reporting: Empirical evidence from Australia. Journal of Contemporary Accounting & Economics, 10(1), 1-15. https://doi.org/10.1016/j. jcae.2013.11.003
- TUBITAK (2020). Gerçekleştirilen sektörler bazında Ar-Ge harcamaları [Sectoral R&D expenditures]. Retrieved from https://www.tubitak.gov.tr/sites/default/files/18842/bty20.pdf
- Ullah, S., Akhtar, P., & Zaefarian, G. (2018). Dealing with endogeneity bias: The generalized method of moments (GMM) for panel data. Industrial Marketing Management, (71), 69-78. https://doi.org/10.1016/j.indmarman.2017.11.010
- Ünsal, H., Atabey Ertürk, S., & Bıyık, G. (2019). Türk bankacılık sektöründe vergi planlaması analizi [Tax planning analysis in Turkish banking sector]. Sayıştay Dergisi, (113), 9-43.
- Vrzina, S. (2018). Corporate income tax planning and financial performance: Evidence from Serbia. Contemporary Issues in Economics, Business and Management, 463-472.
- Vu, T. A. T., & Le, V. H. (2021). The effect of tax planning on firm value: A case study in Vietnam. Journal of Asian Finance, Economics and Business, 8 (2), 973-979. https://doi.org/10.13106/jafeb.2021.vol8.no2.0973
- Wallschutzky, G. (1984). Possible causes of tax evasion. Journal of Economic Psychology, 5(1), 371-384. https://doi.org/10.1016/0167-4870(84)90034-5
- Warda, J. (2001). Measuring the value of R&D tax treatments in OECD countries. OECD Science Technology Industry, (27), 185-211.
- Windmeijer, F. (2005). A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics, (126), 25-51. https://doi.org/10.1016/j.jeconom.2004.02.005
- Yerdelen Tatoğlu, F. (2020). İleri panel veri analizi [Advanced panel data analysis]. (4th ed.). İstanbul, Turkey: Beta Publishing.
| APA | BAYRAKTAR Y, Tütüncü A (2022). Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. , 563 - 581. 10.26650/ibr.2022.51.995585 |
| Chicago | BAYRAKTAR YAŞAR,Tütüncü Asiye Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. (2022): 563 - 581. 10.26650/ibr.2022.51.995585 |
| MLA | BAYRAKTAR YAŞAR,Tütüncü Asiye Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. , 2022, ss.563 - 581. 10.26650/ibr.2022.51.995585 |
| AMA | BAYRAKTAR Y,Tütüncü A Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. . 2022; 563 - 581. 10.26650/ibr.2022.51.995585 |
| Vancouver | BAYRAKTAR Y,Tütüncü A Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. . 2022; 563 - 581. 10.26650/ibr.2022.51.995585 |
| IEEE | BAYRAKTAR Y,Tütüncü A "Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector." , ss.563 - 581, 2022. 10.26650/ibr.2022.51.995585 |
| ISNAD | BAYRAKTAR, YAŞAR - Tütüncü, Asiye. "Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector". (2022), 563-581. https://doi.org/10.26650/ibr.2022.51.995585 |
| APA | BAYRAKTAR Y, Tütüncü A (2022). Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. Istanbul business research, 51(2), 563 - 581. 10.26650/ibr.2022.51.995585 |
| Chicago | BAYRAKTAR YAŞAR,Tütüncü Asiye Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. Istanbul business research 51, no.2 (2022): 563 - 581. 10.26650/ibr.2022.51.995585 |
| MLA | BAYRAKTAR YAŞAR,Tütüncü Asiye Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. Istanbul business research, vol.51, no.2, 2022, ss.563 - 581. 10.26650/ibr.2022.51.995585 |
| AMA | BAYRAKTAR Y,Tütüncü A Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. Istanbul business research. 2022; 51(2): 563 - 581. 10.26650/ibr.2022.51.995585 |
| Vancouver | BAYRAKTAR Y,Tütüncü A Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector. Istanbul business research. 2022; 51(2): 563 - 581. 10.26650/ibr.2022.51.995585 |
| IEEE | BAYRAKTAR Y,Tütüncü A "Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector." Istanbul business research, 51, ss.563 - 581, 2022. 10.26650/ibr.2022.51.995585 |
| ISNAD | BAYRAKTAR, YAŞAR - Tütüncü, Asiye. "Does Tax Planning Affect R&D Expenditures? A Study of Borsa Istanbul (BIST) Manufacturing Sector". Istanbul business research 51/2 (2022), 563-581. https://doi.org/10.26650/ibr.2022.51.995585 |
