Tax Avoidance, Investment Efficiency The Role of Managerial Ability and CEO Overconfidence: Evidence from Egypt | ||||
| المجلة العلمية للدراسات المحاسبية | ||||
| Volume 7, Issue 1, January 2025, Page 709-775 PDF (1.92 MB) | ||||
| Document Type: المقالة الأصلية | ||||
| DOI: 10.21608/sjar.2025.421004 | ||||
 View on SCiNiTO | ||||
| Author | ||||
| Asmaa Ibrahim Abd El Rehim* | ||||
| Assistant professor. Department of Accounting, Higher Technological Institute Tenth of Ramadan | ||||
| Abstract | ||||
| This paper attempts to examine the effect of managerial ability (Low managerial- High managerial) and CEO overconfidence (Good CEO - Weak CEO) on the relationship between both tax avoidance and the efficiency of investment. This research tests hypotheses based on a sample of 80 Egyptian firms listed in Stock Exchange covering the years 2018 to 2023. The study using regression to analyze the impact of managerial ability categorized as (Low- High) on the association between both tax avoidance and the efficiency of investment (positive investment – negative investment). And the impact of CEO over confidence (Good over confidence – Weak CEO over confidence) on the association between both tax avoidance and the efficiency of investment (positive investment – negative investment). The results indicate that firms with high (low) managerial ability show increased (decreased) efficiency in their investments when tax avoidance increases. Additionally, the results indicate that firms with good (weak) CEO overconfidence show increased (reduced) investment efficiency when tax avoidance increases. This result is consistent with (Lee et al., 2018; Gan, 2019; Ngelo et al., 2020 ; Widuri et al., 2020); Tuljannah and Helmy,2023 ;Dayuningtyas, and Rahmiati,2020). These findings explained that Managers’ personality attributes (over confidence - managerial ability) can play an important role in firm policy. It leads managers to use risky financial strategies, such as tax avoidance, to finance their investment projects, which may be reflected in their investment decisions. | ||||
| Keywords | ||||
| CEO overconfidence; investment efficiency; managerial ability; tax avoidance | ||||
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