The impact of tax avoidance on cost of debt: The moderating role of ownership structure in Vietnamese listed companies from 2010 to 2021

Abstract

This study investigates the effect of tax avoidance behavior on the cost of debt among listed companies in Vietnam from 2010 to 2021. Using a sample of non-financial enterprises, the authors examine the direct relationship between tax avoidance and cost of debt, as well as the moderating role of institutional and managerial ownership. The findings suggest that tax avoidance behavior increases the cost of debt, and this effect is more pronounced among enterprises with low institutional and managerial ownership. The study highlights the potential trade-offs between the benefits and risks of tax avoidance and the importance of ownership structure in mitigating agency problems. The findings contribute to the literature on tax avoidance and cost of debt in emerging markets and have practical implications for policymakers and corporate decision-makers in Vietnam.