Luận văn thạc sĩ UEH gender diversity in corporate boardroom and tax avoidance the evidence in hose

i

UNIVERSITY OF ECONOMICS ERASMUS UNVERSITY ROTTERDAM

HO CHI MINH CITY INSTITUTE OF SOCIAL STUDIES

VIETNAM THE NETHERLANDS

VIETNAM – THE NETHERLANDS

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

GENDER DIVERSITY IN CORPORATE BOARDROOM

AND TAX AVOIDANCE

THE EVIDENCE IN HOSE LISTED FIRMS

BY

DAO THI HAN

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, December 2016

LUAN VAN CHAT LUONG download : add [email protected]

ii

UNIVERSITY OF ECONOMICS ERASMUS UNVERSITY ROTTERDAM

HO CHI MINH CITY INSTITUTE OF SOCIAL STUDIES

VIETNAM THE NETHERLANDS

VIETNAM – THE NETHERLANDS

PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

GENDER DIVERSITY IN CORPORATE BOARDROOM

AND TAX AVOIDANCE

THE EVIDENCE IN HOSE LISTED FIRMS

A thesis submitted in partial fulfilment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

BY

DAO THI HAN

Academic Supervisor:

Nguyen Thi Thuy Linh

HO CHI MINH CITY, December 2016

LUAN VAN CHAT LUONG download : add [email protected]

iii

ABSTRACT

Using data set of 296 publicly listed firms in Ho Chi Minh Stock Exchange from 2010 to

2015, the study analyses the engagement of female board members, also in case of being leader

of board and executive manager, on tax avoidance activities, measured by three proxies. The

fixed effect regression results indicate gender diversity in boardroom is negatively associated

with tax avoidance measured by effective tax rate but chairwomen are more engaged in tax

avoidance measured by book-tax difference. As a result, the presence of women in boardroom of

HOSE listed firms is important to shareholders who consider about firms’ transparency or profit.

LUAN VAN CHAT LUONG download : add [email protected]

i

TABLE OF CONTENT

LIST OF ABBREVIATIONS............................................................................................ iv

LIST OF FIGURE............................................................................................................... v

LIST OF TABLE ............................................................................................................... vi

CHAPTER ONE INTRODUCTION ........................................................................... 1

1.1. Vietnam overview........................................................................................................ 1

1.1.1. Female labor and pay gap in Vietnam ...................................................................... 1

1.1.2. Women participation in firm management in Vietnam ............................................ 2

1.1.3. Tax avoidance in Vietnam ........................................................................................ 3

1.2. Research objective ....................................................................................................... 6

1.3. Research design ........................................................................................................... 7

CHAPTER TWO LITERATURE REVIEW .............................................................. 9

2.1. Gender diversity and corporate governance ................................................................ 9

2.1.1. Resource-dependence theory .................................................................................. 11

2.1.2. Agency theory......................................................................................................... 11

2.1.3. Gender equality reaction in corporate boardroom .................................................. 12

2.2. Tax avoidance and corporate governance.................................................................. 13

2.2.1. Tax avoidance ......................................................................................................... 13

2.2.2. Tax avoidance and corporate governance............................................................... 14

2.3. Gender diversity in boardroom and tax avoidance .................................................... 15

2.3.1. Women’ participation in boardroom and tax avoidance......................................... 16

2.3.2. Chairwomen and tax avoidance .............................................................................. 17

2.3.3. Female executive in boardroom and tax avoidance................................................ 18

LUAN VAN CHAT LUONG download : add [email protected]

ii

2.3.4. Summary................................................................................................................. 19

CHAPTER THREE METHODOLOGY.................................................................... 20

3.1. Analytical framework ................................................................................................ 20

3.2. Data and data source .................................................................................................. 20

3.3. Research model.......................................................................................................... 21

3.3.1. Baseline model........................................................................................................ 21

3.3.2. Variable explanation ............................................................................................... 23

3.4. Research methodology............................................................................................... 26

3.4.1. Regression models.................................................................................................. 26

3.4.2. Robust standard Errors............................................................................................ 27

CHAPTER FOUR EMPIRICAL RESULT............................................................... 28

4.1. Descriptive statistic.................................................................................................... 28

4.1.1. Summary descriptive statistic ................................................................................. 28

4.1.2. Women board directors in HOSE listed firms........................................................ 30

4.1.3. Tax expense in HOSE listed firms having women board directors........................ 32

4.2. Empirical result.......................................................................................................... 33

4.2.1. GAAP effective tax rate.......................................................................................... 34

4.2.2. CASH effective tax rate .......................................................................................... 35

4.2.3. Book-tax differences............................................................................................... 37

4.3. Summary results......................................................................................................... 38

CHAPTER FIVE CONCLUSION.............................................................................. 40

4.1. Conclusions................................................................................................................ 40

4.2. Implications................................................................................................................ 41

4.3. Limitations................................................................................................................. 41

LUAN VAN CHAT LUONG download : add [email protected]

iii

REFERRENCE................................................................................................................. 43

APPENDIX A SELECTED FIRMS LISTED IN HOSE............................................. 48

APPENDIX B CORRELATION MATRIX ................................................................ 50

APPENDIX C MULTICOLLINEARITY TEST......................................................... 52

APPENDIX D PANEL DATA REGRESSION RESULTS – FEM............................ 54

APPENDIX E PANEL DATA REGRESSION RESULTS – REM............................ 59

APPENDIX F HETEROSKEDASTICITY AND AUTOCORRELATION TEST..... 64

APPENDIX G REGRESSION WITH ADJUSTED STANDARD ERRORS............. 66

LUAN VAN CHAT LUONG download : add [email protected]

iv

LIST OF ABBREVIATIONS

BTD: book-tax different

CEO(s): Chief of Executive officer(s)

CFO(s): Chief of Finance officer(s)

CIT: Corporate Income Tax

ETR: effective tax rate

EU: European Union

FDI: Foreign directed investment

FEM: Fixed effect model

GAAP: Generally Accepted Accounting Principle

GSO: General Statistics Office

HNX: Hanoi Stock Exchange

HOSE: Ho Chi Minh Stock Exchange

ILO: International Labor Organization

OECD: Organization for Economic Co-operation and Development

REM: Random effect model

ROA: Return on asset

ROE: Return on equity

ROI: Return on investment

SG&A: Selling, general and administration

VAT: Value-added tax

VCCI: Vietnam Chamber of Commerce and Industry

VWEC: Vietnam Women Entrepreneurs Council

LUAN VAN CHAT LUONG download : add [email protected]