2024, Vol. 5, Issue 1, Part A
Tax shield and the value of listed non-finance entities in Nigeria
Author(s): Benjamin Nduka OKOCHA and Edirin JEROH
Abstract: This research examined the influence which tax shield could have on the value of listed firms in Nigeria. Tax shield in this study was measured using debt tax shield and non-debt tax shield; whereas, firm value had Tobin’s Q ratio as its proxy. The study covered a 10 year period (2012 -2021) and secondary data were obtained from the published financial statements of 62 companies. All data were sourced through the Machameratios’ database. Pursuant of the study’s objective, hypotheses were advanced and tested with the robust regression method. In addition, relevant descriptive and diagnostics tests were conducted. The finding from the analytical procedure shows that while debt tax shield could not exert significant influence on firm value (Tobin’s Q ratio), the non-debt tax shield apparently exhibited a position and significant relationship with firm value. We therefore recommend that organizations should strategically fund capital projects and expansion plans by leveraging on a greater proportion of debt. Also, the Nigerian government should further strategize on improving the ease of doing business in the country by building on its previous efforts and offer more tax incentives using non-debt tax shield procedures, which are popular in nations like China.
Pages: 12-17 | Views: 158 | Downloads: 71
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How to cite this article:
Benjamin Nduka OKOCHA, Edirin JEROH. Tax shield and the value of listed non-finance entities in Nigeria. Asian J Manage Commerce 2024;5(1):12-17.
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