Good corporate governance and tax planning that affect the enterprise value of listed companies on the Stock Exchange MAI

Abstract

Background and Aims: Good corporate governance fosters transparency and credibility within an organization, enhancing investor confidence and contributing to long-term enterprise value. At the same time, effective tax planning helps reduce tax costs and increase cash flow, which can be utilized for business expansion or generating returns for shareholders. Therefore, both factors play a crucial role in sustainably enhancing the value of a business. This study aims to : 1) Test the relationship between good corporate governance and the value of businesses listed on the Market for Alternative Investment (MAI). 2) Test the relationship between good corporate governance and tax planning of businesses listed on the Market for Alternative Investment (MAI). 3) Test the relationship between tax planning and the value of businesses listed on the Market for Alternative Investment (MAI)

Methodology: Using data from SET-SMART, the Thai Institute of Directors Association, annual reports, and Form 56-1 from 103 companies listed on the Market for Alternative Investment (MAI) between 2021 and 2023, with a total of 303 observations. Descriptive statistics, correlation coefficients, and multiple regression analysis were employed to test the hypotheses.

Results: This research is exploratory in nature. The results reveal a significant negative relationship between corporate governance ratings (CGR) and Tobin’s Q at the 0.05 level. This may be attributed to excessive information disclosure in a market that is not conducive, leading to companies with good governance facing operational inefficiencies and a decline in firm value. The study also finds that companies with good governance can reduce tax burdens by enhancing transparency in organizational management and effective tax administration, which helps mitigate risks and strengthens their competitive ability. Furthermore, the debt-to-asset ratio (D/A) shows a significant positive relationship with Tobin’s Q at the 0.01 level, suggesting that companies managing debt effectively can increase firm value. Effective tax planning also plays a crucial role in simplifying the relationship between good corporate governance and firm value, as it improves operational efficiency and enhances firm value in the long term.

Conclusion: Good corporate governance shows a negative relationship with firm value and tax planning, which may reflect the increased costs associated with compliance to governance principles. However, tax planning does not have a direct relationship with firm value, suggesting that tax factors may influence businesses in dimensions other than directly determining their value