기업수명주기 개선이 조세회피에 미치는 영향

[Purpose] The main purpose of this study is to examine the relationship between a firm’s life－cycle improvement and it’s propensity to engage in corporate tax avoidance. We hypothesized that the tax avoidance tendency of a firm will be affected by its life－cycle improvement. [Methodology] The sample consists of manufacturing firms listed on the Korean Stock Exchange over the 2002－2017 period. Our final sample is comprised of 5,547 firm－year observations. First, we classify firms’ life－ cycle into three stages (Growth, Maturity and Decline) based on Anthony and Ramesh (1992). Second, we consider a firm as the firm whose life－ cycle is improved (FLCI) if the firm belongs to Growth for consecutive two years, or if the firm’s life－cycle stage changes from Maturity or Decline to Growth during two years. Third, the propensity to engage in corporate tax avoidance is measured as two variables: book－tax difference (BTD) and discretionary BTD (DDBTD) estimated following Desai and Dharmapala (2006). To test our hypothesis, we regress tax avoidance on firms’ life－cycle improvements using fixed－effect model. [Findings] First, on average, FLCI has larger BTD or DDBTD compared to the other firms. Second, regression results show that firms’ life－cycle improvements have positive impacts on both BTD and DDBTD, signifying that FLCI engages in more corporate tax avoidance than the others. [Implications] The findings of this study suggest that a firm’s tax avoidance tendency is affected by its life－cycle improvement, and contribute to current knowledge on the tax planning practice of Korean manufacturing firms.