Year: 2026
Type: article
Abstract: General Background: Corporate valuation reflects financial performance, governance practices, and sustainability considerations. Specific Background: Tax avoidance strategies create potential financial benefits alongside tax uncertainty, while environmental, social, and governance (ESG) performance provides additional information for investors. Knowledge Gap: Previous studies report inconsistent relationships between tax avoidance and firm value, particularly regarding the moderating roles of ESG scores and tax risk. Aims: This study examines these relationships using an unbalanced panel of 91 observations from 25 basic materials and energy companies during 2020–2024. Data were analyzed through fixed effects panel regression with Driscoll–Kraay standard errors. Results: Tax avoidance showed no statistically significant direct relationship with firm value (p = 0.523). ESG scores exhibited significant positive moderation (β = 0.211; p < 0.001), weakening the hypothesized negative relationship. Conversely, tax risk demonstrated significant negative moderation (β = −0.258; p = 0.003), strengthening the negative relationship. Both moderators also exhibited statistically significant direct coefficients. Novelty: The study identifies contrasting moderating roles of sustainability performance and tax uncertainty within an integrated corporate valuation framework. Implications: Corporate tax strategies should consider sustainability practices and tax risk management, while investors should evaluate financial and nonfinancial information when assessing firm value. Highlights: The direct association between fiscal strategies and market valuation was statistically insignificant (p = 0.523). ESG performance exhibited a positive interaction coefficient (β = 0.211). Greater fiscal uncertainty exhibited a negative interaction coefficient (β = −0.258). Keywords: Firm Value, Tax Avoidance, ESG Score, Tax Risk
Institution: Lampung University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7225333757