The effect of thin capitalization and executive character on tax avoidance with institutional ownership as a moderating variable

Nurindah Rizki Dian Gunadi; Yongky Rangga Yuda Nugraha

doi:10.54957/akuntansiku.v5i1.2010

Authors

Nurindah Rizki Dian Gunadi Universitas Pembangunan Nasional Veteran Jakarta
Yongky Rangga Yuda Nugraha Universitas Pembangunan Nasional Veteran Jakarta

DOI:

https://doi.org/10.54957/akuntansiku.v5i1.2010

Keywords:

Executive characteristics, Institutional ownership, Mining industry, Tax avoidance, Thin capitalization

Abstract

This study examines the effect of thin capitalization and executive characteristics on tax avoidance, as well as the moderating role of institutional ownership in mining companies listed on the Indonesia Stock Exchange during the 2020–2024 period. The research adopts a quantitative approach using 151 observations from 43 companies selected through purposive sampling. Data were analyzed using multiple linear regression. The results indicate that thin capitalization has a negative effect on tax avoidance, while executive characteristics have a positive effect. Institutional ownership is proven to weaken the effect of thin capitalization on tax avoidance, but it does not moderate the effect of executive characteristics. These findings suggest that institutional monitoring is more effective in controlling debt-based financing policies than tax-related decisions influenced by executives’ risk preferences.

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