Corporate Tax Avoidance and Value of Excess Cash Holdings of Quoted Non-Financial Firms in Nigeria

Abstract

This study investigates if there is any relationship between tax avoidance and value of excess cash holdings of non-financial listed firms in Nigeria. It uses secondarily sourced panel data over the period from 2005 to 2020 of 75 such firms listed on the floor of the Nigerian Exchange Group (NXG). The generalized method of moments (GMM) results reveal that current effective tax rate (current ETR), Henry and Sansing’s (2014) measure and book-tax-differences (BTD) are positively significant with value of excess cash holdings; long-run current ETR, lagged cash ETR and tax shelter score are negatively significant with value of excess cash holdings while lagged current ETR, cash effective tax rate (cash ETR) and long-run cash ETR are insignificant. The study concludes with some recommendations.

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