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Corporate Governance Issues regarding Transfer Pricing Taxation: Evidence in Japan

Asian Business Research

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Field Value
 
Title Corporate Governance Issues regarding Transfer Pricing Taxation: Evidence in Japan
 
Creator Ohnuma, Hiroshi
Sakurada, Joe
 
Description This study focuses on a transfer pricing taxation (TPT) action as one of corporate governance issues. TPT is a tool for preventing the manipulation of transfer pricing. We investigate which factors affect corporate valuation, using a sample of Japanese companies to which TPT was unintentionally applied. With this regard, we put emphasis on the role of corporate governance for the preparation against a risk event. In addition, we attempt to determine what kinds of corporate governance structure are most likely to prepare for an unexpected TPT inspection. As a result of our examination, we find that the association of the directors’ shareholding ratio (DIR) with the cumulative abnormal rate of return (CAR) is statistically significant. We also find that this relation has both a hump and a negative hump, which implies that it is a cubic function. Based on these results, we conclude that a DIR of about 5% is the optimum ratio for a firm facing an emergency situation, and this shows some implications about what kinds of corporate governance structure.
 
Publisher July Press Pte. Ltd.
 
Contributor —
 
Date 2017-10-31
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journal.julypress.com/index.php/abr/article/view/238
10.20849/abr.v2i3.238
 
Source Asian Business Research; Vol 2, No 3 (2017); p58
2424-8983
2424-8479
 
Language eng
 
Relation http://journal.julypress.com/index.php/abr/article/view/238/196
 
Rights Copyright (c) 2017 Hiroshi Ohnuma, Joe Sakurada
http://creativecommons.org/licenses/by/4.0