Title: How does organisational capital influence firm value? Moderating effect of tax haven utilisation

Authors: Elisa Tjondro; I. Made Narsa; Heru Tjaraka

Addresses: Faculty of Economics and Business, Accounting Department of Universitas Airlangga, Jalan Airlangga No. 4-6, Surabaya, 60115, Indonesia; School of Business and Management, Accounting Department of Petra Christian University, Jalan Siwalankerto 121-131, Wonocolo, Surabaya, 60236, Indonesia ' Faculty of Economics and Business, Accounting Department of Universitas Airlangga, Jalan Airlangga No. 4-6, Surabaya, 60115, Indonesia ' Faculty of Economics and Business, Accounting Department of Universitas Airlangga, Jalan Airlangga No. 4-6, Surabaya, 60115, Indonesia

Abstract: This study investigates whether organisational capital and tax haven utilisation through subsidiaries are associated with firm value. We use 705 observations of Indonesian-listed firms from the agriculture and manufacturing sectors as the main contributors to the gross domestic product (GDP). The sample has been analysed using the weighted least square (WLS) panel regression technique over the period 2015-2019. The findings suggest that the positive association between organisational capital and firm value is stronger when tax haven subsidiaries are utilised. High organisational capital (OC) firms are often linked to limited access to financing since intangible assets are difficult to use as collateral. Tax haven subsidiaries can serve as a risky tradeoff for OC firms. Our study provides novel empirical evidence supporting social tax justice and stakeholder theory and encourages the cooperation of all stakeholders to resolve the recognition and assessment of intangible capital in financial reports.

Keywords: organisational capital; intangible capital; tax haven utilisation; firm value; tax audit; sustainable tax behaviour.

DOI: 10.1504/IJMEF.2024.140541

International Journal of Monetary Economics and Finance, 2024 Vol.17 No.4, pp.301 - 321

Received: 13 May 2023
Accepted: 21 Oct 2023
Published online: 22 Aug 2024 *

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