Table II Effect of internal control on...

Table II

Effect of internal control on tax avoidance

	CETR1			CETR
Variable	Coef.	p-value	VIF	Coef.	p-value	VIF
C	0.487	0.000***		0.443	0.000***
IC	0.199	0.042***	2.17	0.272	0.022**	2.81
SIZE	−0.329	0.010***	1.01	−0.303	0.147	1.12
ROA	−1.850	0.000***	2.17	−1.757	0.000***	2.65
FAM				−0.575	0.035**	8.49
UE				0.130	0.368	8.93
IC×FAM				0.553	0.089*	8.85
IC×UE				−0.283	0.347	9.45
R²	0.061			0.052
Prob>F	0.000			0.000
n	240			240

	CETR1			CETR
Variable	Coef.	p-value	VIF	Coef.	p-value	VIF
C	0.487	0.000***		0.443	0.000***
IC	0.199	0.042***	2.17	0.272	0.022**	2.81
SIZE	−0.329	0.010***	1.01	−0.303	0.147	1.12
ROA	−1.850	0.000***	2.17	−1.757	0.000***	2.65
FAM				−0.575	0.035**	8.49
UE				0.130	0.368	8.93
IC×FAM				0.553	0.089*	8.85
IC×UE				−0.283	0.347	9.45
R²	0.061			0.052
Prob>F	0.000			0.000
n	240			240

Notes: CETR_it, company’s cash effective tax rate i in year t; IC_it, disclosure score of company internal control i in year t; FAM_it, ownership of shares by company family i in year t; EU_it, uncertainty of company i’s environment in year t; SIZE_it, company size is measured using the logarithm of the total assets of company i in year t; ROA_it, return on company assets i in year t. *,**,***Significant at α=10, 5 and 1 percent (one-tailed): $CETR 1_{i t} = α_{i t} + β_{1} {IC}_{i t} + β_{2} {SIZE}_{i t} + β_{3} {ROA}_{i t} + ε_{i t} CETR 2_{i t} = α_{i t} + β_{1} {IC}_{i t} + β_{2} {FAM}_{i t} + β_{3} UE + β_{4} IC \times {FAM}_{i t} + β_{5} IC \times {UE}_{i t} + β_{6} {SIZE}_{i t} + β_{7} {ROA}_{i t} + ε_{i t}$

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