The Empirical Test between Firm Size and Effective Tax Rates─ ─ Positive Accounting Theory: the Study of Political Cost Hypothesis.

• Main Authors: Tsai, Su-Shing, 蔡素幸
• Other Authors: Nei, Fung-Yu
• Format: Others
• Language: zh-TW
• Published: 1993
• Online Access: http://ndltd.ncl.edu.tw/handle/94914729070794461813

碩士 === 國立中山大學 === 企業管理研究所 === 81 === The influence of political environment is more and more important. Firm size has been used as a proxy for the firm''s political costs and hence manager''s proclivity to choose income reducing accounting methods. This study examine the association between firm size and effective tax rates. Besides, effective tax rates, however, may contain a factor, net operating losses (NOLs), attributable to firm''s operating results and experience rather than to success in the political process. The purpose of this study is also to assess the extent of the effect of NOLs on the overall relationship of firm size and effective tax rates. Path analysis is employed to isolate the effect of firm size on effective tax rates that is attribu- table to NOLs. The findings, which are insensitive to alternative measures of firm size and alernative measures of effective tax rates, are mostly consistent with the political cost hypothesis in Positive Accounting Theory. And, NOLs don''t affect the relation- ship between firm size and effective tax rates. The association of firm size and effective tax rates will not be a biased basis for drawing inferences about political cost hypothesis.