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CHAPTER ONE
INTRODUCTION

1.1 Background to the study

Over the years, Nigeria has witnessed rapid economic growth, attracting both

domestic and foreign investors to its capital markets. As a result, the country's stock

exchange has experienced considerable expansion, showcasing the presence of numerous

non-financial firms seeking external financing (Dada, 2016). However, this growth has also

brought forth concerns related to the governance practices and tax management strategies

employed by these firms. As suggested by Onyali and Okafor (2018), corporate governance

mechanisms play significant roles in the financial operations of non-financial firms. As such,

understanding these mechanisms and strategies is crucial for ensuring transparency,

accountability, and adherence to tax regulations. Corporate monitoring mechanisms are

essential in ensuring that the interests of shareholders and other stakeholders are protected

(Obidike, Emeni, Ofuru & Simon-Oke, 2020). By scrutinizing the actions and decisions of

management, these mechanisms aim at preventing conflicts of interest and mitigate

institutional problems across listed firms in Nigeria as opined by Odukoya, Oladeji and

Adeleke (2015).

Effective monitoring mechanisms are especially crucial in listed companies where

dispersed ownership and separation of control provide fertile ground for potential

opportunistic behavior (Ezejiofor & Ezenwafor, 2020). On the other hand, tax sheltering

strategies refer to legal practices undertaken by companies to minimize their tax liabilities

through exploiting loopholes in tax laws or engaging in aggressive tax planning (Fagbemi,

Olaniyi & Ogundipe, 2019). Fagbemi, Olaniyi and Ogundipe (2019) further argued that while

tax planning is a legitimate practice aimed at optimizing tax burdens, excessive and unethical
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tax sheltering activities can undermine the integrity of the tax system and lead to revenue

losses for governments.

Given the potential interconnectedness between corporate monitoring mechanisms

and tax sheltering strategies, it becomes imperative to investigate their relationship in the

specific context of listed non-financial firms in Nigeria. Extensive research has been

conducted globally on this topic. These studies include Ezejiofor and Ezenwafor (2020),

Ogbodo and Abusomwan (2021), Edwin and Victor (2019), Ogbeide and Osaretin (2018),

Onyali and Okafor (2018), Mappadang, Widyastuti and Wijaya (2018). However, the

Nigerian context presents unique challenges and opportunities that necessitate a

comprehensive examination. In view of this, this present study draws upon existing literature

and theoretical underpinnings from institutional theory and resource dependence theory to

underscore the gap prevalent in the literature. By shedding light on the relationships between

corporate monitoring mechanisms and tax sheltering strategies, this research study aims to

contribute to the extant literature on corporate governance and taxation in Nigeria as well as

provide insights that can assist policymakers, regulators, investors, and other stakeholders in

formulating effective strategies for promoting good governance and curbing tax evasion in

listed non-financial firms in Nigeria.

1.2 Statement of the problem

The corporate monitoring mechanisms and tax sheltering strategies employed by

listed non-financial firms in Nigeria pose significant challenges in terms of accountability,

transparency, and ethical tax practices. This research aims to comprehensively examine these

practices within the context of Institutional theory to shed light on the conceptual causes,

negative aspects, and potential gaps in the existing literature. The adoption of tax sheltering

strategies by non-financial firms in Nigeria can be attributed to several conceptual causes.

The pressure to conform to prevailing norms and expectations within the institutional
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environment, which influences firms to mimic the tax practices of successful peers (Oluseyi,

Oladejo & Solomon, 2019). As put forward by Onyali and Okafor (2018), regulative

pressures stemming from formal rules and regulations imposed by the government and tax

authorities can shape firms’ tax management decisions. Hence the need for this present study.

According to Umeh, Okegbe and Ezejiofor (2020), the utilization of tax sheltering

strategies and the lack of effective corporate monitoring mechanisms in listed non-financial

firms in Nigeria can have far-reaching and coordinated negative consequences. When

companies engage in aggressive tax planning or exploit loopholes in tax laws, it often results

in reduced tax payments. This, by implication reduces the overall tax revenue available to the

government, impacting essential public services and hindering economic development.

Insufficient funds for infrastructure, education, healthcare, and other critical sectors can

impede societal progress and hamper the overall well-being of citizens (Hulland, Rabinovich

& Grewal, 2018). The use of tax sheltering strategies and a lack of effective corporate

monitoring mechanisms can as well erode stakeholder trust in listed non-financial firms.

Shareholders, employees, customers, and the general public expect companies to act ethically

and responsibly (Chytis, Tasios & Filos, 2020).

There is a growing body of literature on corporate governance and tax management

practices. These include studies by Ezejiofor and Ezenwafor (2020), Ogbodo and

Abusomwan (2021), Edwin and Victor (2019), Ogbeide and Osaretin (2018), Onyali and

Okafor (2018), Mappadang, Widyastuti and Wijaya (2018), Uniamikogbo, Bennee and

Adeusi (2019), Oyenike, Olayinka, and Emeni (2016) in Nigeria; Hoseini, Gerayli, and

Valiyan (2018) in Iran; Chytis, Tasios and Filos (2020) in Greece using several databases;

among several others. These studies provide counterintuitive predictions on the link between

corporate monitoring mechanisms and tax sheltering strategies. While some document a

positive effect, others report a negative association. These inconsistencies could be attributed
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to the adoption of different surrogates, research techniques, study area and tools by previous

researchers. This present study seeks to address this gap by utilizing Institutional theory to

provide a comprehensive understanding of the factors influencing tax management decisions

and the effectiveness of monitoring mechanisms. It adopts audit committee size, board

independence and CEO duality as predictor variables while effective tax rate served as the

dependent variable.

1.3 Objectives of the study

The main objective of this study was to examine the relationship between corporate

monitoring mechanisms and tax sheltering strategies of listed non-financial firms in Nigeria.

However, the specific objectives were to:

1. To ascertain the relationship between audit committee size and effective tax rate of listed

non-financial firms in Nigeria

2. To establish the relationship between board independence and effective tax rate of listed

non-financial firms in Nigeria

3. To investigate the relationship between CEO duality and effective tax rate of listed non-

financial firms in Nigeria

1.4 Research questions

The research questions for this study were:

1. What effect does audit committee size have on effective tax rate of listed non-financial

firms in Nigeria?

2. To what extent does board independence affect effective tax rate of listed non-financial

firms in Nigeria?

3. How does CEO duality affect effective tax rate of listed non-financial firms in Nigeria?

1.5 Research hypotheses

The following hypothesis were formulated for this study;

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Ho1: There is no significant relationship between audit committee size and effective tax

rate of listed non-financial firms in Nigeria

Ho2: There is no significant relationship between board independence and effective tax rate

of listed non-financial firms in Nigeria

Ho3: There is no significant relationship between CEO duality and effective tax rate of

listed non-financial firms in Nigeria

1.6 Scope of the study

This study examined the relationship of corporate monitoring mechanisms and tax

sheltering strategies of non-financial goods firms in Nigeria listed on the floor of the Nigerian

Exchange Group for the period of 10 years; from 2013 to 2022. A sample of 24 non-financial

firms were however drawn from 3 sectors (Industrial goods, conglomerates and health care)

listed on the Nigerian Exchange Group. The independent variable (corporate monitoring

mechanisms) was proxied by audit committee size, board independence and CEO duality

while the dependent variable (tax sheltering strategies) was proxied by effective tax rate.

1.7 Significance of the study

This present study on corporate monitoring mechanisms and tax sheltering strategy of

listed non-financial firms in Nigeria will be beneficial to various stakeholders. Here are some

of the stakeholders who will benefit from the findings of this study:

Investors: Investors, both individual and institutional, will benefit from this study as it

provides insights into the effectiveness of corporate monitoring mechanisms in Nigerian

firms. They can assess the risks associated with tax sheltering practices and evaluate the

overall governance and risk management practices of these firms.

Regulators and policymakers: This study will be valuable for regulators and policymakers

responsible for formulating and implementing corporate governance and tax policy in
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Nigeria. It will assist in identifying areas where improvements are needed in order to create a

more transparent and accountable business environment.

Auditors and accounting professionals: The study's insights can be useful for auditors and

accounting professionals who play a crucial role in ensuring financial reporting accuracy and

compliance with tax laws. Understanding the impact of monitoring mechanisms on tax

sheltering strategies can help auditors identify potential red flags and improve their

assessment of tax risks during the auditing process.

Corporate boards and management: By understanding the relationship between corporate

monitoring mechanisms and tax sheltering strategies, boards can make more informed

decisions about their monitoring practices. This knowledge will help them enhance their

governance structures, oversight, and internal control systems, ultimately leading to better

compliance with tax regulations and reducing the risks associated with tax sheltering.

Academics and Researchers: The study can also be beneficial to academics and researchers

in the fields of corporate governance, taxation, and accounting. Researchers will build upon

these findings and explore other related topics to deepen our understanding of the interaction

between governance mechanisms and tax avoidance practices.

1.8 Organization of the study

This research work comprised of five chapters. The first chapter was the introduction

of the study which includes background of the study, statement of the problem, objectives of

the study, research questions, and research hypotheses, scope of the study and definition of

terms. The second chapter showed review of related literature of the study which consisted

of; conceptual framework, theoretical framework, empirical framework, and summary of

literature review and research gap. Chapter three captured the research methodology used in

making findings which includes research design, population of the study and the method of

population determination, sample size and sample size determination, sample technique,
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sources of data and method of data collection, method of data analysis, and limitations of the

study. Chapter four showed the data presentation, analysis and discussion of the findings

which included data presentation, data analysis, test of hypothesis, discussion of findings and

chapter five provided the summary of the findings, conclusion, recommendations,

contribution to knowledge and suggestions for further research.

1.9 Operational definition of terms peculiar to the study

The following definitions are in line with the context of this study.

Corporate monitoring mechanisms: These are processes and structures put in place within

a corporation to oversee and regulate the actions of management. Examples of corporate

monitoring mechanisms include board of directors, independent audits, internal controls, and

external regulatory agencies.

Tax sheltering: Tax sheltering refers to the use of legal strategies and loopholes to reduce or

eliminate tax liabilities. It involves structuring financial transactions or activities in a way that

takes advantage of specific provisions in tax laws to minimize tax payments.

Tax sheltering strategies: These are specific tactics employed by individuals or businesses

to minimize their tax obligations. Common tax sheltering strategies include offshore tax

havens, transferring profits to low-tax jurisdictions, use of tax credits and deductions, and

engaging in complex financial transactions that exploit loopholes.

Audit committee size: Audit committee size refers to the number of members serving on a

company’s audit committee. The audit committee is typically a subgroup of the board of

directors responsible for overseeing financial reporting processes, reviewing internal controls,

and ensuring compliance with regulatory requirements. The size of the committee can vary

depending on the company’s governance structure and legal requirements.

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Board independence: Board independence is the proportion of independent non-executive

directors on corporate boards, calculated from the number of independent members divided

by the number of members on the board.

CEO duality: CEO duality refers to a situation where the roles of Chief Executive Officer

(CEO) and Chairman of the Board are held by the same individual. This can have

implications for corporate governance and decision-making processes.

Effective tax rate: The effective tax rate is the average tax rate paid by an individual or

business on their taxable income after taking into account various tax deductions, credits, and

incentives. It represents the actual percentage of income that is paid in taxes and is often

calculated by dividing the total tax paid by the taxable income

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CHAPTER TWO

REVIEW OF RELATED LITERATURE

This chapter focuses on the review of related studies carried out in Nigeria and other

countries for advancement. The chapter is organized into conceptual framework, theoretical

framework and empirical review.

2.1 Conceptual framework

The conceptual relationships among the variables are depicted in figure 2.1 below;

Corporate monitoring mechanisms Tax sheltering strategies

(Independent variable) (Dependent variable)

Audit committee size

Board independence Effective tax rate

CEO duality

Fig 2.1: Conceptual framework of variables

Source: Researcher’s compilation (2023)

2.1.1 Corporate monitoring mechanisms

Corporate monitoring mechanisms refer to the various mechanisms and practices that

are put in place to ensure effective oversight, control, and accountability within a company.

These mechanisms are designed to monitor and guide the actions of corporate executives and

directors, thereby promoting transparency, ethical behavior, and shareholder value. One

important aspect of corporate monitoring mechanisms is the role played by the board of

directors. According to Ogbeide and Osaretin (2018), the Board of Directors acts as the main

monitoring mechanism in a company and is responsible for overseeing and guiding

management activities on behalf of shareholders. The board is often composed of

independent directors who are not affiliated with the company’s management, and their
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primary role is to represent shareholders’ interests and provide objective oversight. Another

key monitoring mechanism is the audit committee. The audit committee is a subcommittee of

the board of directors, and its primary function is to ensure the integrity of financial reporting

and internal control systems. It is responsible for appointing and overseeing the external

auditor, reviewing financial statements, and ensuring compliance with relevant regulations

and standards (Chytis, Tasios & Filos, 2020).

However, other monitoring mechanisms include executive compensation and

incentives, internal control systems, external auditors, and regulatory authorities (Zalata &

Roberts, 2016). Through the active involvement of independent directors, audit committees,

and other mechanisms, these monitoring practices help mitigate agency conflicts, promote

transparency, and foster long-term value creation for all stakeholders. These mechanisms

collectively aim to align the interests of executives with those of shareholders, minimize

agency conflicts, and ensure that the company operates in accordance with legal and ethical

standards. Ogbeide and Osaretin (2018) howver noted that the effectiveness of corporate

monitoring mechanisms can vary across firms and industries. Hence, corporate monitoring

mechanisms play a critical role in ensuring that companies operate in the best interests of

their shareholders.

2.1.2 Audit committee size

The size of the audit committee is a crucial aspect of corporate governance that can

influence the effectiveness of oversight and control mechanisms within a company. In the

context of tax sheltering strategies, the size of the audit committee can have implications for

the level of scrutiny and oversight of tax-related activities. Empirical studies have examined

the relationship between audit committee size and tax sheltering strategies in various

countries. For instance, Agbebi, Yusoff, Oyedokun and Oladele (2016) conducted a study on

listed non-financial firms in Nigeria and found that larger audit committees were associated
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with a lower likelihood of engaging in tax sheltering strategies. This suggests that a larger

audit committee size may enhance the oversight and control over tax-related activities,

thereby reducing the propensity to engage in aggressive tax planning practices.

The presence of a larger audit committee can contribute to more effective monitoring

and decision-making. A larger committee is likely to have a diverse range of skills,

knowledge, and expertise, which can facilitate a more comprehensive and critical review of

tax-related issues (Agbebi et al., 2016). This can lead to increased accountability and

transparency in relation to tax planning activities, as well as a more cautious approach

towards engaging in aggressive tax avoidance or evasion. Furthermore, a larger audit

committee might also provide better representation and protection of shareholder interests. It

can act as a check and balance mechanism against management’s potential opportunistic

behavior and conflicts of interest in relation to tax planning strategies (Odukoya, Oladeji &

Adeleke, 2015). However, it is important to note that the effectiveness of audit committee

size in mitigating tax sheltering strategies is contingent upon other factors, such as the

independence and expertise of committee members, their commitment to fulfilling their

oversight responsibilities, and the organizational culture that encourages ethical behavior

(Agbebi et al., 2016).

2.1.3 Board independence

Board independence refers to the composition of a corporate board that is free from

any conflicts of interest and external influences. It ensures that board members can make

decisions objectively and in the best interests of the company and its stakeholders. In the

context of tax sheltering strategies, board independence can have implications for the

effective tax rate of listed non-financial firms in Nigeria. Research on the relationship

between board independence and tax sheltering strategies is limited, particularly in the

Nigerian context. However, studies conducted in other countries provide insights into this
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relationship. For example, Hoseini, Gerayli, and Valiyan (2018) and Chytis, Tasios and

Filos (2020) found that firms with more independent boards tend to have lower effective tax

rates. This implies that board independence may reduce the inclination towards aggressive

tax planning and tax sheltering strategies. The presence of independent directors on a board

can enhance the effectiveness of corporate oversight, including tax-related decision-making.

Independent directors bring objectivity and a diversity of perspectives to discussions

concerning tax planning and compliance. They are less likely to have personal or business

interests that could compromise their ability to make independent judgments (Ogbodo &

Abusomwan, 2021). This can help ensure that tax strategies are aligned with ethical and legal

principles, rather than solely focused on minimizing tax liabilities.

Furthermore, independent directors can play a crucial role in monitoring and

challenging management’s tax practices. They can scrutinize the effectiveness of tax planning

strategies, assess the associated risks, and hold management accountable for their decisions

(Uniamikogbo, Bennee & Adeusi, 2019). This active monitoring can contribute to more

responsible tax practices, reducing the likelihood of excessive tax sheltering or aggressive tax

planning. However, it is important to note that board independence alone may not be

sufficient to ensure responsible tax behaviors. The expertise and knowledge of directors in

tax-related matters also play a critical role. Independent directors with relevant experience

and expertise in tax can contribute significantly to the development and implementation of

effective tax strategies (Onyali & Okafor, 2018).

2.1.4 CEO duality

CEO duality refers to a governance structure where an individual simultaneously

holds the roles of CEO and Chairman of the Board within a company. This concentration of

power has both advantages and disadvantages, which may impact various aspects of a firm’s

operations, including its tax strategies and effective tax rate. Research by Ezejiofor and
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Ezenwafor (2020) showed that CEO duality is significant and has a positive coefficient on tax

planning of food and beverage companies in Nigeria. This suggests that when one-person

controls both the executive and oversight functions, there may be less scrutiny and

accountability, possibly leading to suboptimal tax governance practices. One potential

relationship between CEO duality and the effective tax rate lies in the lack of independent

oversight as suggested by Rezaei and Azimi (2015).

With limited checks and balances, the CEO may have greater discretion to engage in

tax planning strategies that minimize tax liabilities. This could result in lower effective tax

rates for non-financial firms in Nigeria. However, it is important to note that not all firms

with CEO duality engage in aggressive tax planning, and the actual impact may vary

depending on other factors such as industry dynamics and corporate governance mechanisms

(Ezejiofor & Ezenwafor, 2020). Conversely, CEO duality may also have positive

implications for tax management. Given their comprehensive understanding of both the

operational and strategic aspects of the business, CEOs in dual roles may be better positioned

to develop more efficient tax strategies. These strategies can reduce tax burdens, enhance

competitiveness, and boost firm performance as suggested Ijeoma and Ezejiofor (2013).

2.1.5 Tax sheltering strategies

Tax sheltering strategies refer to legitimate methods utilized by companies to

minimize their tax liabilities within the boundaries of tax laws and regulations. These

strategies involve taking advantage of specific provisions, deductions, credits, exemptions,

and incentives offered by the tax system (Odukoya, Oladeji & Adeleke, 2015). The result of

these strategies reflects in the prevailing effective tax rate at any point in time. In the context

of listed non-financial firms in Nigeria, tax sheltering strategies can be employed to legally

reduce the effective tax rate and maximize after-tax profits. While it is challenging to find
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specific research on tax sheltering strategies in Nigerian firms, knowledge about these

practices can be inferred from general principles and observations in taxation literature.

One common tax sheltering strategy is to take advantage of tax incentives provided by

the government. Governments often introduce tax incentives to promote certain sectors or

activities that contribute to economic growth and development. Companies can strategically

plan their operations to qualify for these incentives, such as tax breaks for investing in

specific industries or regions (Hulland, Rabinovich & Grewal, 2018). Another strategy is to

undertake income shifting within multinational corporations. This involves allocating profits

to low-tax jurisdictions or using transfer pricing techniques to shift income to subsidiaries

located in countries with more favorable tax regimes as suggested by Umeh, Okegbe and

Ezejiofor (2020). Though this practice aligns with arm’s length principles, which is subject to

scrutiny by tax authorities.

Moreover, companies can engage in debt shifting to reduce their taxable income. By

leveraging debt financing, firms can deduct interest expenses, which lowers their taxable

profits (Mappadang, Widyastuti & Wijaya, 2018). However, restrictions on interest

deductibility and thin capitalization rules may limit the effectiveness of this strategy.

Additionally, companies can employ strategic timing of income recognition and expense

deductions. They may accelerate or defer revenue recognition and expenses to optimize their

taxable profits in a given year (Mgbame, Chijoke-Mgbame, Yekini & Kemi, 2017). In

conclusion, tax sheltering strategies in listed non-financial firms in Nigeria involve

employing legitimate measures to reduce tax liabilities. These strategies also include utilizing

tax incentives, income shifting, debt shifting, and strategic timing of income recognition and

expense deductions. It is crucial for companies to ensure compliance with applicable laws

and regulations and adhere to ethical principles while implementing these strategies.

2.1.6 Effective tax rate

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The effective tax rate (ETR) is an important measure used to assess a company’s tax

burden relative to its pre-tax profits. In the context of tax sheltering strategies, the ETR can

be influenced by corporate monitoring mechanisms employed by listed non-financial firms in

Nigeria. These mechanisms help ensure transparency, accountability, and adherence to tax

compliance policies, thus reducing potential tax avoidance or evasion. One corporate

monitoring mechanism that can affect the ETR is the presence of an independent board of

directors or audit committee. These oversight bodies are responsible for reviewing financial

statements, including tax provisions, and ensuring compliance with tax laws (Nwaorgu,

Oyekezie & Abiahu, 2020). Through their scrutiny, they can discourage aggressive tax

planning or the use of questionable tax sheltering strategies. Additionally, effective internal

control systems play a vital role in monitoring and managing the tax function. Internal

controls encompass processes, policies, and procedures that safeguard assets, ensure accurate

financial reporting, and promote compliance with laws and regulations (Zalata & Roberts,

2016). Robust internal controls related to tax functions can help prevent inadvertent errors,

reduce the risk of non-compliance, and enhance the accuracy of tax calculations, ultimately

impacting the ETR.

Furthermore, external audit plays a crucial role in corporate monitoring. External

auditors provide an independent assessment of a company’s financial statements, including

the tax provisions and disclosures (Chytis, Tasios & Filos, 2020). Their scrutiny helps ensure

that tax positions taken by the company are justifiable and comply with applicable tax laws,

minimizing the risk of aggressive tax planning. Corporate governance practices also influence

the effectiveness of monitoring mechanisms. For example, strong governance practices that

encourage transparency, accountability, and ethical behavior create an environment where tax

avoidance or evasion is less likely to occur (Ogbodo & Omonigho, 2021).

2.1.7 Corporate monitoring mechanisms and effective tax rate

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The relationship between corporate monitoring mechanisms, such as audit committee

size, board independence, and CEO duality and the effective tax rate (ETR) of listed non-

financial firms in Nigeria is an important aspect to consider in understanding the impact of

these mechanisms on tax management practices.

Audit committee size can influence the ETR by providing more resources and

expertise to oversee tax-related matters. Research suggests that larger audit committees are

associated with improved tax compliance and reduced tax aggressiveness. A larger committee

allows for greater specialization, enabling more rigorous scrutiny of tax positions and

potentially deterring the use of aggressive tax sheltering strategies.

Board independence, defined as the proportion of independent directors on the board,

is another crucial mechanism that can affect the ETR. Independent directors bring

impartiality and objectivity to the decision-making process, reducing the likelihood of tax

avoidance or evasion. Ogbeide and Osaretin (2018) documented a negative association

between board independence and tax aggressiveness. Greater board independence enhances

monitoring and oversight, leading to improved tax compliance and potentially lowering the

ETR.

CEO duality may also have positive implications for tax management. Given their

comprehensive understanding of both the operational and strategic aspects of the business,

CEOs in dual roles may be better positioned to develop more efficient tax strategies. These

strategies can reduce tax burdens, enhance competitiveness, and boost firm performance as

suggested Ijeoma and Ezejiofor (2013).

2.2 Theoretical framework

The nexus between corporate tax mechanisms and tax sheltering strategies cannot be

established without some theoretical underpinnings. These theories include Resource

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dependency theory and Institutional theory. However, this present study anchors on

Institutional theory.

2.2.1 Resource Dependence Theory by Pfeffer and Salancik (1978)

Resource Dependence Theory, propounded by Jeffrey Pfeffer and Gerald Salancik in

1978 focuses on how organizations manage their dependence on external resources. This

theory is applicable to understanding the corporate monitoring mechanisms and tax sheltering

strategies of listed non-financial firms in Nigeria. According to Resource dependence theory,

organizations seek to minimize their reliance on external entities by acquiring and controlling

critical resources (Pfeffer & Salancik, 1978). In the case of non-financial firms in Nigeria,

these resources can include tax incentives, government contracts, and public trust. One aspect

of resource dependence in this context is the reliance on tax incentives or exemptions offered

by the government. Non-financial firms in Nigeria may employ tax sheltering strategies to

minimize their tax liabilities and preserve resources for other purposes. These strategies can

help reduce their dependence on external sources and enable them to utilize resources

effectively (Zalata & Roberts, 2016).

Additionally, the governing board plays a crucial role as a resource controller. It

consists of independent directors, audit committees, and diverse members who oversee the

firm’s operations and decision-making process (Chytis, Tasios & Filos, 2020). In the context

of tax management, an effective governing board can discourage aggressive tax sheltering

strategies to maintain relationships with stakeholders and ensure responsible tax practices.

Collaboration and social exchange are also significant within the Resource Dependence

Theory framework. Non-financial firms in Nigeria may engage in tax sheltering strategies to

maintain collaborative relationships with the government and tax authorities. These practices

can be seen as a reciprocal exchange of resources, where firms comply with certain tax

regulations in exchange for continuous access to tax incentives or other benefits (Omesi &
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Appah, 2021). Through these networks, firms can acquire information and resources related

to tax management, influencing their tax sheltering strategies.

2.2.2 Institutional theory by Meyer and Rowan (1977)

Institutional theory, propounded by John Meyer and Brian Rowan in 1977, focuses on

how organizations conform to and are influenced by social and institutional norms. This

theory is relevant for understanding the corporate monitoring mechanisms and tax sheltering

strategies of listed non-financial firms in Nigeria. According to Institutional Theory,

organizations are shaped by external forces, including societal rules, norms, and expectations

(Meyer & Rowan, 1977). These external pressures influence organizational behavior and

decision-making, including tax management practices and corporate monitoring mechanisms,

to ensure conformity with institutional norms.

The Institutional environment plays a crucial role in shaping tax sheltering strategies

in listed non-financial firms in Nigeria. These organizations respond to pressures from

various stakeholders such as the government, tax authorities, investors, customers, and the

wider society (Oluseyi, Oladejo & Solomon, 2019). To maintain legitimacy and avoid

sanctions or reputational damage, firms develop tax sheltering strategies that align with

prevailing institutional norms and expectations regarding responsible tax practices. One key

aspect of institutional theory relevant to this research is isomorphism, which refers to the

tendency of organizations to mimic or adopt similar structures and practices as their peers in

order to gain acceptance and legitimacy (). In the context of tax sheltering strategies, non-

financial firms in Nigeria may engage in mimetic isomorphism, where they imitate the tax

practices of other successful firms in their industry. This imitation can be driven by the desire

to conform, gain legitimacy, or simply reduce uncertainty (Agbebi et al., 2016).

Corporate monitoring mechanisms, such as board oversight and external audits, play a

vital role in ensuring compliance with institutional norms and expectations. Institutional
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theory suggests that firms adopt monitoring mechanisms in response to external pressures to

demonstrate their commitment to responsible tax practices (Hulland, Rabinovich & Grewal,

2018). Effective monitoring mechanisms assure stakeholders, including government,

investors, and the wider public, that the firm is operating according to legal and ethical

standards when managing its tax obligations. In conclusion, Institutional Theory provides

insights into how listed non-financial firms in Nigeria navigate their tax management

practices and employ tax sheltering strategies in response to external institutional pressures.

The theory highlights isomorphism, regulative, normative, and cognitive pressures as key

factors shaping firms’ tax practices. To maintain legitimacy, firms adopt tax sheltering

strategies that align with institutional norms, while implementing corporate monitoring

mechanisms to assure stakeholders of their compliance with legal and ethical tax obligations.

2.3 Empirical review

Alabi and Adekunle (2023) explored the impact of ownership concentration on tax

aggressive behavior in Nigerian non-financial firms. The sample for this study comprised 109

firms. Descriptive and influential statistics were employed to analyze the data. The findings

revealed a positive relationship between ownership concentration and tax sheltering

strategies. Data collected from 2013 to 2022 demonstrated that firms with concentrated

ownership structures tend to engage in more aggressive tax planning activities.

Mohammed and Olufemi (2023) examined the relationship between board diversity

and tax planning strategies in Nigerian non-financial firms. The sample size for this study

included 100 firms. The data were analyzed using descriptive statistics and regression

analysis conducted with aid of the e-view software. The findings, derived from firm-level

data collected during the period 2013 to 2022, revealed a significant association between

board diversity and tax sheltering behaviors. This suggests that firms with diverse boards are

more likely to engage in tax planning activities.

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Okoro and Nwabueze (2022) conducted a study to examine the relationship between

CEO duality and tax avoidance strategies in Nigerian non-financial firms. The sample size for

this study consisted of 114 firms. The researchers utilized the General Method of Moment to

test their hypotheses. The empirical analysis, based on firm-level data collected from 2012 to

2021, found a positive association between CEO duality and higher levels of tax sheltering

practices. This suggests that firms with combined CEO and board chair roles are more likely

to engage in tax avoidance activities.

Ojo and Ibrahim (2022) investigated the association between audit committee

characteristics and tax risk management strategies in Nigerian listed companies. The sample

consisted of 112 listed companies. Multiple regression analysis was employed to analyze the

data. The results, based on firm-level data ranging from 2012 to 2021, indicated a significant

impact of certain audit committee attributes on tax sheltering practices. This suggests that

boards with specific characteristics, such as independence and expertise, play a crucial role in

managing tax risks effectively.

Adegoke and Yakubu (2022) explored the influence of external corporate governance

mechanisms, such as institutional ownership and board independence, on tax avoidance

practices in Nigerian listed companies. The sample size for this study comprised 80 listed

firms. Fixed and random effects regression procedures were utilized to test the hypotheses.

The study, based on data collected from 2016 to 2021, unveiled a significant relationship

between external governance mechanisms and tax sheltering strategies. This implies that

firms with higher levels of institutional ownership and greater board independence tend to

engage in more tax avoidance practices.

Ogbodo and Omonigho (2021) investigated the relationship between corporate

governance and tax avoidance of quoted consumer goods firms in Nigeria. The sample was

purposively drawn from all the consumer goods manufacturing firms of the NSE. Data were
 21

obtained from annual reports and accounts of the quoted companies. The study used both

descriptive and inferential statistics to analyse the data. From the analysis, the study found

that there is a positive relationship between board size, CEO duality and effective tax rate of

quoted consumer goods manufacturing firms, and this relationship is not statistically

significant. Since an overly large board size may not improve the efficiency of decisions, the

firm should maintain optimum board size level and not exceed the sufficient number

necessary to drive the company through its vision.

Ogbodo and Abusomwan (2021) examined the relationship board structure and

corporate tax aggressiveness in listed Nigerian firms. Specifically, Board size (BDS), board

independence (BDIND) and board ownership (BDOWN) are examined as indicators of board

structure. A sample of 80 firms was then used for the analysis. In this study, secondary data,

by way of annual reports and accounts of the sampled companies in Nigeria and some

relevant NSE fact books were used to collect data for 2010-2019. The effect of board

structure on tax aggressiveness was analyzed using panel regression. The estimation results

reveal that BDIND, BDS and BDOWN all have a negative coefficient and significant at 5%

suggesting that an increase these board structure variables results in a reduction in the tax

paid/ pre-tax income ratio and this implies an increase in tax aggressive practices.

Chytis, Tasios and Filos (2020) examined the effect of corporate governance

mechanisms on tax planning during financial crisis using a sample of 55 non-financial

companies listed on the Athens Stock Exchange (ASE) during the 2011–2015. Results

showed Board size, were not found to exert a significant influence on corporate tax planning

of listed companies in Greece.

Ezejiofor and Ezenwafor (2020) determine the effect of CEO duality on the effective

tax rate of quoted foods and Beverage companies. Ex-post facto research design was adopted.

A purposive sampling technique was applied in selecting nine (9) companies during the data
 22

collection process. Data were collected from annual reports and accounts of the sampled

companies from 2013-2019. Data for the study analyzed using descriptive statistics and

regression was used with aid of the e-view was at 95% confidence at five degrees of freedom.

The result shows that CEO duality was significant and had a positive coefficient on tax

planning of food and beverage companies in Nigeria. The study, therefore recommended that

non-separation of CEO from Chairman of the Board may lead to higher levels of tax

planning; and an opportunity for manager’s rent extraction, because of their dominating role

to ensure that adequate oversight roles are separated.

Nwaorgu, Oyekezie and Abiahu (2020) examined the effect of corporate tax on the

sustainable financial performance of listed firms in Nigeria, specifically the listed

manufacturing firms. The study employed ex post facto research design using data from 10

listed manufacturing firms. The data span across 5 years ranging from 2013-2017 and were

analyzed using simple linear regression. Findings from the study revealed that corporate tax

payment has no significant effect on the return on equity of firms. Further findings revealed a

positive and significant effect of corporate tax payment on the debt to equity ratio of the

listed firms.

Oyeshile and Adegbie (2020) evaluated the effect of corporate tax planning on the

financial performance of Quoted food and beverages firms in Nigeria, with a population

comprising 15 quoted food and beverages firms on the Nigerian Stock Exchange for ten years

(2008-2018). The study employed ex-post facto research design. The data were analyzed

using descriptive and influential statistics. The findings revealed that corporate tax planning

variables of effective tax rate, capital intensity and thin capitalization do not have a

significant positive effect on financial performance of a quoted food and beverages firm in

Nigeria. The analysis revealed that all proxies of corporate tax planning practices do not

significant effect on return on capital employed of quoted food, and beverages firm in Nigeria
 23

Umeh, Okegbe and Ezejiofor (2020) determined the effect of tax planning on firm

value in quoted consumer goods firms in Nigeria. Ex-post facto research design was adopted

for the study. A sample size 21 of firms was selected based on availability of the financial

statement of the selected firms from the population of all the non-financial quoted on the

Nigeria Stock Exchange. Data for the study will be obtained from annual published financial

of the non-financial covering a period of ten years from 2009-2018. Ordinary lease square

regression was used to test the three formulated hypotheses with the aid of E-View 9.0. This

study found that Effective tax rate (ETR) to impact negatively on firm value, but this impact

was statistically significant. However, the study found that, book tax difference (BTD);

impact positively on firm value, but this impact was not statistically significant.

Edwin and Victor (2019) examined the relationship between corporate board

characteristics and tax aggressiveness of manufacturing firms in Nigeria. The sample

comprised of forty-nine (49) manufacturing firms listed on the Nigeria stock exchange

(NSE). The study used secondary data; obtained from annual financial statements for the

years 2011 to 2016. The data were analysed using the fixed effect panel regression model.

The results showed that board size and board independence exert significant negative effect

on tax aggressiveness; while, board gender had an insignificant negative effect.

Fagbemi, Olaniyi and Ogundipe (2019) examined the effect of corporate tax planning

and financial performance of Systemically Important Banks (SIBs) in Nigeria. The study

adopted the ex-post facto research design. The sample comprised of eight SIBs in Nigeria.

The study used secondary data; obtained from annual reports of the SIBs. The data were

analysed using the Pooled OLS technique. The results show that ETR had a negative and

significant effect on ROE.

Thanjunpong and Awirothananon (2019) ascertained the effect of tax planning on

financial performance in the Stock Exchange of Thailand. The sample comprised of 873 firm-
 24

year observations. The study used secondary data; obtained from company website and

SETSMART database for the years 2014 to 2016. The data were analysed using multiple

regression technique. The results showed that ETR had a positive effect on ROE; while, ratio

of tax/asset was negative. The variable Big 4 auditors was positive and significant in both the

ETR and ratio of tax/asset models.

Uniamikogbo, Bennee and Adeusi (2019) investigated the effect of corporate

governance on tax aggressiveness in Nigeria in the oil and gas marketing firms in Nigeria.

The secondary source of data collection method was used in generating data from the annual

reports and accounts of the selected firms for the period 2013- 2017. Findings from the study

showed that a positive and significant relationship exists between board size and tax

aggressiveness

Ogbeide and Osaretin (2018) examined corporate governance mechanisms and tax

aggressiveness of listed firms in Nigeria. Eighty- five (85) quoted non-financial firms were

selected and data were collected over the period 2012 to 2016. The results obtained reveal

that board size negatively and significantly impact tax aggressiveness.

Onyali and Okafor (2018) examined the effect of corporate governance mechanisms

on tax aggressiveness among selected manufacturing firms in Nigeria. The data used for the

study were derived from the financial statements of manufacturing companies listed on the

Nigerian Stock Exchange (NSE) from 2005-2016. The outcome of the analysis of data

revealed that board size has no significant effect on tax aggressiveness.

Bayar, Huseynov and Sardarli (2018) investigated the effect of corporate governance

on the relationship between corporate tax avoidance and financial constraints. The sample

comprised of over thirty-five thousand (35,000) firm-year observations from 1990 to 2015.

They employed two-stage least squares (2SLS) analysis to validate the hypothesis. The

results showed that for firms with strong governance, tax avoidance had negative impact on
 25

financial constraints. However, in weak governance, tax avoidance is associated with greater

financial constraints and a greater likelihood of financial distress.

Onyali and Okafor (2018) examined the effect of corporate governance mechanisms

on tax aggressiveness of quoted manufacturing firms on the Nigerian Stock Exchange. The

study used the ex-post facto research design. The sample comprised forty-four (44) listed

manufacturing firms. The study relied on secondary data; obtained from annual reports and

accounts from the period 2005 to 2016. The hypotheses were tested using fixed and random

effects regression procedures. The results showed that board size had a negative non-

significant effect on tax aggressiveness (ETR); while, board diversity and independent

director had positive significant effect on tax aggressiveness (ETR). The proportion of non-

executive directors to executive directors had negative significant effect on tax

aggressiveness (ETR).

Hoseini, Gerayli and Valiyan (2018) investigated the relationship between

demographic characteristics of the board of directors’ structure and tax avoidance. The

sample comprised a total of five hundred and five (505) firm-year observations from

companies listed on the Tehran Stock Exchange. The study relied on secondary data; between

the periods 2012 to 2016. The hypothesis was tested using panel regression models. The

results showed that presence of women on corporate boards reduces corporate tax avoidance;

also, firms with larger board sizes were associated with more tax avoidance.

Mappadang, Widyastuti and Wijaya (2018) examined the effect of corporate

governance mechanism on tax avoidance. The study adopted the descriptive causality design.

The sample comprised eighty-seven (87) manufacturing firms listed on the Indonesian Stock

Exchange during the years 2012 to 2016. The study relied on secondary data; and smart PLS3

was used for analyzing the data and test the hypotheses. The results showed that board of
 26

commissioners had a positive significant effect on tax avoidance; while, institutional

ownership had a negative significant effect on tax avoidance.

Kadir (2018) investigated the impact of corporate governance mechanisms on

corporate tax avoidance in Nigerian listed manufacturing companies. The sample comprised

of twenty-three (23) manufacturing companies quoted on the Nigerian Stock Exchange. The

study used secondary data; obtained from annual reports for the years 2012 to 2014. The data

were analysed using the random effects panel regression procedure. The results showed that

CEO duality had a positive significant effect; while, board independence had a negative

significant effect on corporate tax avoidance. Board size and independent audit committee

were both positive and not statistically significant.

Kurawa and Saidu (2018) conducted a study titled ‘Corporate tax and financial

performance of listed Nigerian consumer goods’. The study adopted the ex-post facto

research design. The sample comprised of sixteen consumer goods firms quoted on the NSE.

The study used secondary data; obtained from annual reports for the years 2006 to 2016. The

data were analysed using multiple regression analysis. The results showed an insignificant

negative relationship between corporate tax and ROA. However, age and risk had positive

non-significant relationship with ROA; while, size showed a positive significant relationship

with ROA.

Ogbeide and Iyafekhe (2018) undertook an empirical assessment of tax

aggressiveness of listed firms in Nigeria. The study adopted the longitudinal research design.

The sample comprised of eighty-five (85) quoted manufacturing firms. The study used

secondary data; obtained from annual financial statements for the years 2012 to 2016. The

data were analysed using descriptive analytic method. The results revealed that twenty-six

(26) firms from the sample were highly tax aggressive; thirteen (13) were moderately tax
 27

aggressive; sixteen (16) were tax aggressive at equilibrium; while, thirty (30) firms were not

tax aggressive.

Ogbeide and Obaretin (2018) explored corporate governance mechanisms and tax

aggressiveness of listed firms in Nigeria. The study adopted the longitudinal and causal effect

research designs. The sample comprised of eighty-five (85) quoted non-financial firms. The

study relied on secondary data; obtained from annual financial statements for the years 2012

to 2016. The hypotheses were tested using the General Method of Moment. The results

showed that ownership concentration has a positive significant effect on tax aggressiveness;

whereas, managerial ownership, board size, board gender diversity and board independence

have negative significant effect.

Salawu and Ololade (2018) assessed corporate tax avoidance of listed firms in

Nigeria. The sample comprised of nineteen (19) listed firms drawn from the list of NSE 30

firms on the Nigeria Stock Exchange. The study used secondary data; obtained from the

annual financial statements. The data were analysed using descriptive statistics. The results

showed that there exists variation across firms in the average long run cash ETR.

Ogbeide (2017) undertook an assessment of firm characteristics and tax

aggressiveness of listed firms in Nigeria. The study adopted the causal effect research design.

The study used secondary data; obtained from annual reports for the years 2012 to 2016. The

data were analysed using dynamic panel data. The results showed that firm size, audit quality

and interest charges had positive significant effect on tax aggressiveness. However, leverage

had a negative significant effect.

Salawu, Ogundipe, and Yeye (2017) undertook a study titled “Granger causality

between corporate tax planning and firm value of nonfinancial quoted companies in Nigeria”.

The sample comprised of fifty (50) quoted nonfinancial firms. The study used secondary

data; obtained from annual financial reports and the Nigerian Stock Exchange fact books for
 28

the years 2004 and 2014. The hypothesis was tested using pairwise VAR Granger Causality

test. The results showed that that there is no causality between tax planning (ETR) and firm

value (Tobin Q) at 5% level of significance. Thus, there is no significant casual nexus

between Tax Planning (ETR) to Firm Value (Tobin Q).

Odoemela Ironkwe and Nwaiwu (2016) analysed the association between corporate

governance mechanism and tax planning in Nigeria. The study made use of secondary data

from the audited financial statement of banks quoted in Nigerian Stock Exchange from 1994

to 2014. The findings of study revealed that there is no significant effect between board size

and tax aggressiveness of firms in Nigeria.

Uchendu, Ironkwe, and Nwaiwu (2016) examined the relationship between corporate

governance mechanism and tax planning in Nigeria. The population comprised of twenty-

three (23) commercial banks quoted in Nigerian Stock Exchange as at December, 2015. The

study used secondary data; obtained from audited financial statement and the CBN bulletin

from 1994 to 2014. The data were analyzed using Ordinary Least Squares (OLS). The results

showed that both board size and audit committee independence had negative significant

effect on tax savings.

Oyenike, Olayinka, and Emeni (2016) examined the relationship between female

directors and tax aggressiveness of listed banks in Nigeria. The study used a cross sectional

time-series research design. The sample comprised eleven (11) listed banks. The study relied

on secondary data obtained from 2012 to 2014. The hypotheses were tested using panel

regression analysis. The results showed that there was a positive non-significant effect of

female directors on tax aggressiveness. The interaction of board size with female directors

was positive and significantly associated with reduced level of tax aggressiveness. Board size

had a negative effect; while, independent board members was positive and significant.
 29

Amidu, Kwakye, Harvey and Yorke (2016) examined the relationship between

corporate tax avoidance (CTA), earnings management (EM) and corporate social

responsibility (CSR) within a context of an emerging economy. The study employs system

methods of moments (GMM) and logistic regression to establish whether firms in Ghana

manage earnings and avoid tax to finance corporate social responsibility. The results show

that almost all the firms sampled have engaged in some management of their earnings and tax

during the period. The study also find evidence that an increase in CSR activities is

associated with an increase in EM, suggesting that, sampled firms may use CSR as a cover

for engaging in opportunistic behaviour such as earnings management. By extension, these

results have important policy implications for policy makers in assessing the effectiveness of

the tax laws.

Boussaidi and Hamed (2015) assessed the impact of governance mechanisms on tax

aggressiveness. The sample comprised thirty-nine (39) firms listed on the Tunisian Stock

Exchange. The study relied on secondary data; obtained from annual reports and the BVMT

web-site for the period 2006 to 2012. The data was analysed using multiple regression

technique. The results showed that board size had negative non-significant effect on tax

aggressiveness. Diversity, managerial ownership, firm size, and debt had positive significant

effect. The variable of audit quality had a positive non-significant effect; while, ownership

concentration had a negative significant effect.

Armstrong, Rezaei and Azimi (2015) examined the relationship between corporate

governance mechanisms and tax management in companies‟. The sample comprised eighty

(80) companies listed on the Tehran Stock Exchange between the periods 2004 to 2011. The

study relied on secondary data. The data was analyzed using multiple regression technique.

The results showed a significant relationship between independence of board members and

the variables of effective cash tax rate and long-term effective cash tax rate.
 30

2.4 Summary of literature review and gap in literature

Prior studies have examined the nexus between corporate monitoring mechanisms and

tax sheltering strategies in several countries. They include studies by Ezejiofor and

Ezenwafor (2020), Ogbodo and Abusomwan (2021), Edwin and Victor (2019), Ogbeide and

Osaretin (2018), Onyali and Okafor (2018), Mappadang, Widyastuti and Wijaya (2018),

Uniamikogbo, Bennee and Adeusi (2019), Oyenike, Olayinka, and Emeni (2016) in Nigeria;

Hoseini, Gerayli, and Valiyan (2018) in Iran; Chytis, Tasios and Filos (2020) in Greece using

several databases; among several others. These studies provide counterintuitive predictions

on the link between corporate monitoring mechanisms and tax sheltering strategies. While

some document a positive effect, others report a negative association. These inconsistencies

could be attributed to the adoption of different surrogates, research techniques, study area and

tools by previous researchers. Given this backdrop, this present study sought to ascertain the

relationship between corporate monitoring mechanisms and tax sheltering strategies of listed

non-financial firms in Nigeria. Some of these inconsistencies and contradictions are as

depicted in table 2.1 below.

Table 2.1: Summary of literature review and research gap

Author(s) and year Sample, market Methodology Research gap Results and conclusions
of publication studied and period
Alabi and Adekunle 109 non-financial Descriptive This very study The study findings
(2023) firms in Nigeria. and influential placed more demonstrated that firms
2013-2022 statistics were emphasis on with concentrated
employed to ownership ownership structures tend
analyze the concentration to engage in more
data aggressive tax planning
activities.
Mohammed and 100 non-financial Descriptive This study The study findings
Olufemi (2023) firms in Nigeria statistics and gave more revealed a significant
2013-2022. multiple credence to association between
regression Board diversity board diversity and tax
analysis leaving other sheltering behaviors.
monitoring This suggests that firms
tools behind. with diverse boards are
more likely to engage in
tax planning activities.
Okoro and 114 non-financial The study This study The study findings
 31

Nwabueze (2022) firms in Nigeria. utilized the anchored documented a positive

2012-2021. General solely on CEO association between CEO
Method of duality and duality and higher levels
Moment for spanned 2012 of tax sheltering
test of to 2021. practices. This suggests
hypotheses. that firms with combined
CEO and board chair
roles are more likely to
engage in tax avoidance
activities.

Ogbodo and 23 listed consumer Descriptive -Dealt on The study found that
Omonigho (2021) goods firms in and inferential consumer there is a positive
Nigeria. statistics goods firms relationship between
2011-2020 only. board size, CEO duality
-Anchored on and effective tax rate of
tax avoidance. quoted consumer goods
-2011-2020 firms, and this
relationship is not
statistically significant.
Ogbodo and 80 non-financial Multiple -Focused on The estimation results
Abusomwan (2021) firms in Nigeria. regression tax reveal that BDIND, BDS
2010-2019 analysis. aggressiveness. and BDOWN all have a
-Included negative coefficient and
board significant at 5%
ownership as a suggesting that an
predictor increase these board
variable. structure variables results
-2010-2019 in a reduction in the tax
paid/ pre-tax income
ratio and this implies an
increase in tax aggressive
practices.
Ezejiofor and 9 listed foods and Descriptive -Placed more The result shows that
Ezenwafor (2020) beverage statistics and emphasis on CEO duality was
companies in regression CEO duality. significant and had a
Nigeria. analysis -Focused on positive coefficient on
2013-2019 foods and tax planning of food and
beverages beverage companies in
companies Nigeria. The study,
only. therefore recommended
-2013-2019. that non-separation of
CEO from Chairman of
the Board may lead to
higher levels of tax
planning; and an
opportunity for
manager’s rent
extraction, because of
their dominating role to
 32

ensure that adequate

oversight roles are
separated
Chytis, Tasios, & 55 non-financial Panel least -Conducted Results showed Board
Filos (2020) companies listed on regression outside size, were not found to
the Athens Stock Nigeria. exert a significant
Exchange (ASE). -2011-2015. influence on corporate
2011–2015 tax planning of listed
companies in Greece.
Oyeshile and 15 quoted food and Descriptive -Focused on The analysis revealed
Adegbie (2020) beverages firms on and influential food and that all proxies of
the Nigerian Stock statistics beverages corporate tax planning
Exchange. firms in practices do not
2008-2018 Nigeria. significant effect on
-Dealt on return on capital
financial employed of quoted food,
performance. and beverages firm in
-2008-2018 Nigeria
Edwin and Victor 49 manufacturing Fixed effect -Focused on The results showed that
(2019) firms listed on the panel tax board size and board
Nigeria stock regression aggressiveness. independence exert
exchange (NSE) analysis -Sample drawn significant negative
2011-2016 from only effect on tax
manufacturing aggressiveness; while,
firms. board gender had an
-Adopt fixed insignificant negative
effect panel effect.
regression
model
-2011-2016
Uniamikogbo, 11 oil and gas Multiple -Focused on Findings from the study
Bennee and Adeusi. marketing firms in regression listed oil and showed that a positive
(2019) Nigeria. analysis gas marketing and significant
2013-2017 firms in relationship exists
Nigeria. between board size and
Studied tax tax aggressiveness.
aggressiveness.
-2013-2017
Onyali and Okafor 44 listed Fixed and -Focused on The results showed that
(2018) manufacturing random tax board size had a negative
firms in Nigeria. effects aggressiveness non-significant effect on
regression in tax aggressiveness
manufacturing (ETR); while, board
firms in diversity and independent
Nigeria. director had positive
-2005-2016 significant effect on tax
aggressiveness (ETR).
The proportion of non-
executive directors to
executive directors had
 33

negative significant
effect on tax
aggressiveness (ETR)
Mappadang, 87 manufacturing Multiple -Examined the The results showed that
Widyastuti and firms listed on the regression effect of board of commissioners
Wijaya (2018) Indonesian Stock analysis corporate had a positive significant
Exchange during governance effect on tax avoidance;
the years 2012 to mechanism on while, institutional
2016 tax avoidance. ownership had a negative
2012-2016. significant effect on tax
avoidance.
Ogbeide and 85 quoted Descriptive -Anchored on The results revealed that
Iyafekhe (2018) manufacturing statistics and manufacturing twenty-six (26) firms
firms in Nigeria. pooled OLS. firms only. from the sample were
2012-2016 -Placed more highly tax aggressive;
emphasis on thirteen (13) were
tax moderately tax
aggressiveness. aggressive; sixteen (16)
-2012-2016 were tax aggressive at
equilibrium; while, thirty
(30) firms were not tax
aggressive.
Ogbeide and 85 non-financial Longitudinal -Focused The results showed that
Obaretin (2018) firms in Nigeria. and causal mainly on tax ownership concentration
2012-2016 effect aggressiveness. has a positive significant
research -Adopted effect on tax
designs and GMM analysis aggressiveness; whereas,
General -Included managerial ownership,
Method of managerial board size, board gender
Moment ownership as a diversity and board
technique. predictor independence have
variable. negative significant
-2012-2016 effect.
Oyenike, Olayinka, 11 listed deposit Panel -Placed more The results showed that
and Emeni (2016) money banks in regression emphasis on there was a positive non-
Nigeria. analysis. tax significant effect of
2012-2014 aggressiveness. female directors on tax
-Focused only aggressiveness. The
on the banking interaction of board size
sector. with female directors was
-2012-2014 positive and significantly
associated with reduced
level of tax
aggressiveness.
Source: Researcher’s compilation, 2023
 34

CHAPTER THREE
METHODOLOGY
This particular chapter focuses on the research design, population of the study, sample

size and sampling techniques. It also shows the sources of data and method of data collection,

method of data analysis, model specification as well as limitations of the study.

3.1 Research design

This present study adopted an ex-post facto research design. This design was suitable

because the data for the analysis had already existed, leaving no room for the researcher to

manipulate the variables under study

3.2 Population of the study

This present study anchored on three (3) sectors comprising of 26 non-financial firms

listed on the Nigerian Exchange Group from 2013 to 2022. The three sectors selected for this

study were as presented in table 3.1 below.

S/n Sector Number of firms

1. Industrial goods 13
2. Healthcare 7
3. Conglomerates 6
Total 26
Source: Researcher’s compilation (2023)
 35

3.3 Sample size and sample size determination

The sample size for this study stood at 24. This was obtained with the aid of Taro

Yamane (1967) formula with 95% confidence level. The Taro Yamane formula is given as;

n=

Where:
n = sample size required
N = Population
e = significant level = 5%
From the formula above, the sample size of this study is computed as:
n=

n=

n=

n=

n=

n = 24.41 (Approx. 24).

The list of this 24 listed non-financial firms has been shown in table 4.1 (see Appendix I).

3.4 Sampling technique

Purposive sampling technique was used in selecting the required sample. However,

availability of data served as the yardstick for selection.

3.5 Sources of data and method of data collection

The data for the dependent and independent variables were extracted from financial

reports using content analysis methods and compiled using Microsoft Excel software. The

study employed a panel data methodology, which was deemed suitable for the analysis. A

total of 240 pooled observations were obtained, consisting of 24 cross-sectional observations

for each year and ten time-series observations for each non-financial firm regressor and

explained variable. The use of panel data allows for more informative data, increased degrees
 36

of freedom, enhanced efficiency, and enables the examination of fixed and random effects in

longitudinal data sets.

3.6 Method of data analysis

The study adopted multiple regression in analyzing the data via Eviews 10.0. The data

conformed to the standardized regression assumptions, that is, linearity, homoscedasticity,

normality and independence of data. Durbin Watson statistics is within the range of 1-3. The

decision was based on 5% level of significance. Accept null hypothesis (Ho) if probability

value (i.e. P-value or Sig.) is greater than or equals to (≥) stated 5% level of significance (α);

otherwise, reject and accept alternate hypothesis (H 1), if p-value or sig. calculated is less than

5% level of significance (Osisioma, Egbunike & Jesuwunmi, 2015).

3.7 Model specification and operationalization of variables

To achieve the stated objectives of the study, as well as testing the study hypotheses, a

multiple linear regression model was adopted as follows;

Y = βo + β1X1 + β2X2+ β3X3 + μ …………………………………………... (1)

Where;
Y = Tax sheltering strategies (dependent variable)
X = corporate monitoring mechanisms (explanatory/independent variable)
Explicitly, the equation was defined as:
Tax sheltering strategies = ƒ (Corporate monitoring mechanisms) + μ
Therefore, the broad model for this study was modified as;
ETRit = β0 + β1AUDCSz it + β2BODI it + β3CEOD it + µ it …………... (2)
Where;
ETRit = Effective tax rate of firm i in period t
AUDSzit = Audit committee size of firm i in period t
BODIit = Board independence of firm i in period t
CEODit = CEO duality of firm i in period t
β0 = Intercept or regression constant
β1, β2 β3 = Regression coefficients to be estimated for firm i in period t
µ = Stochastic error term.
 37

Table 3.2 Operationalization of variables

Concept Proxy Measurement Source
Corporate monitoring Audit committee Total number of members in Ogbodo and
mechanisms size firm’s audit committee Omonigho (2021) and
(Independent variable) Agbebi et al.,(2016)
Board Board independence is Chytis, Tasios,
independence computed as the proportion Filos (2020) and
of non-executive directors to Ogbodo and
total directors.
Abusomwan (2021)
CEO duality Takes the value of 1 if CEO Ogbodo and
and the chairperson positions Omonigho (2021) and
are held by the same Oyenike, Olayinka
individual, 0 otherwise in the and Emeni (2016).
period (t)
Tax sheltering Effective tax rate This is the proportion of the Ogbodo and
strategies profit before tax paid as tax. Omonigho (2021) and
(Dependent variable) It is computed as tax paid Ogbodo and
divided by profit before tax. Abusomwan (2021)
Source: Author’s compilation, 2023
3.8 Limitations of the study

One limitation of the study is the reliance on financial reports for data extraction,

which may be subject to errors or biases in reporting. Additionally, as the study focuses on

listed non-financial firms in Nigeria, the findings may not be generalizable to other types of

firms or different geographical contexts. Finally, the study's focus on corporate monitoring

mechanisms and tax sheltering strategies may have overlook other important factors that

could influence firm behavior and outcomes.

 38

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS

This chapter focuses on the presentation of data, analysis of the data, testing of the

research hypotheses alongside the discussion of findings based on the results.

4.1 Data presentation

The data for this study is presented in table 4.1(see Appendix I). The data comprise a

panel data of two hundred and forty (240) pooled observations across twenty-four (24) listed

non-financial firms in Nigeria for ten (10) years period (2013-2022). The data include the

dependent variable – Effective tax rate (ETR) and the independent variables which were

Audit committee size (AUDCSz), Board independence (BODI) and CEO duality (CEOD) of

listed non-financial firms in Nigeria.

4.2 Data analysis

Various statistical techniques were utilized in the analysis of data presented in table

4.1 (see Appendix II). These include descriptive statistics, regression assumption tests and

panel multiple regression analysis

4.2.1 Descriptive statistics

The result for the descriptive statistics analysis is as presented in Table 4.2 below;

Table 4.2 Descriptive statistics results

ETR AUDCSZ BODI CEOD

Mean 0.234700 5.575000 0.733033 0.125000

 39

Median 0.239439 6.000000 0.750000 0.000000

Maximum 23.83270 8.000000 0.900000 1.000000
Minimum -11.79322 4.000000 0.545455 0.000000
Std. Dev. 1.889761 0.674242 0.073962 0.331410
Skewness 7.029363 0.997933 -0.124957 2.267787
Kurtosis 110.3597 4.766318 2.673741 6.142857
Jarque-Bera 117237.5 71.03355 1.689017 304.4898
Probability 0.000000 0.000000 0.429769 0.000000
Sum 56.32791 1338.000 175.9280 30.00000
Sum Sq. Dev. 853.5157 108.6500 1.307413 26.25000
Observations 240 240 240 240
Source: Researcher’s compilation (2023)

The results in table 4.2 above indicates that effective tax rate (ETR), audit committee

size (AUDCSz), board independence (BODI) and CEO duality (CEOD) of listed non-

financial firms in Nigeria have mean scores of approximately 0.23, 5.58, 0.73 and 0.13

respectively. This indicates the central or average values for these variables from 2013 to

2022. The median values obtained for effective tax rate (ETR), audit committee size

(AUDCSz), board independence (BODI) and CEO duality (CEOD) of listed non-financial

firms in Nigeria were approximately 0.24, 6.00, 0.75 and 0.00 respectively. These

constituted the middle values for the distributions of these variables under the period covered

in this study (2013-2022).

In terms of the level of variability and dispersion in the distribution of these variables,

the standard deviations obtained for effective tax rate (ETR), audit committee size

(AUDCSz), board independence (BODI) and CEO duality (CEOD) of listed non-financial

firms in Nigeria were approximately 1.89, 0.67, 0.07 and 0.33 respectively. This indicates

varying levels of variability in the distribution with effective tax rate (ETR) indicating high

variations in the distributions. Similarly, the skewness values obtained for effective tax rate

(ETR), audit committee size (AUDCSz), board independence (BODI) and CEO duality

(CEOD) of listed non-financial firms in Nigeria were 7.03, 0.99, -0.12 and 2.27. This

quantifies the asymmetry of the distributions.

 40

In addition, the kurtosis values obtained for effective tax rate (ETR), audit committee

size (AUDCSz), board independence (BODI) and CEO duality (CEOD) of listed non-

financial firms in Nigeria were given as approximately 110.36, 4.77, 2.67 and 6.14

respectively. Since the values of the kurtosis are greater than zero (0), it indicates a

leptokurtic distribution, hence the presence of outliers in the data.

4.2.2 Model evaluation

Residual and coefficient diagnostics were however conducted to assess the suitability

of the model as stated in the previous section. These include normality test, multicollinearity

test and heteroscedasticity test.

4.2.2.1 Normality test

Fig. 4.1 Jarque-Bera Normality test results

Source: E-views 10.0 (Output in Appendix II)

The Jarque-Bera test was employed in this case. As applied, if the p-value associated

with the Jarque-Bera test is below a predetermined significance level (p<0.05), then we reject

the null hypothesis and conclude that the data do not follow a normal distribution pattern.

With a p-value of 0.00000, there is sufficient evidence to enter judgment against the null

hypothesis, hence conclude that the data were not normally distributed.

4.2.2.2 Multicollinearity test

Table 4.3 Variance inflation factors

 41

Coefficient Uncentered Centered

Variable Variance VIF VIF

C 2.343511 161.0201 NA
AUDCSZ 0.034256 74.21933 1.065530
BODI 2.695435 100.5241 1.008890
CEOD 0.141983 1.219434 1.067005

Source: E-views 10.0 (Output in Appendix III)

The VIF measures the extent to which the variance of the estimated regression

coefficients is increased due to multicollinearity. A high VIF indicates a strong correlation

between the predictor variables, suggesting severe multicollinearity issues. VIF value of less

than 10.0 signifies that no severe multicollinearity exists in the model. With a centered

variance inflation factor value of 1.065530, 1.008890 and 1.067005, there is sufficient

evidence to conclude that the explanatory variables in the regression model are not highly

correlated with each other.

4.2.2.3 Heteroscedasticity test

Table 4.4 Cross-section dependence/ Heteroscedasticity test

Test Statistic d.f. Prob.

Breusch-Pagan LM 294.3964 276 0.2135

Pesaran scaled LM -0.238507 0.8115
Pesaran CD 1.107607 0.2680

Source: E-views 10.0 (Output in Appendix II)

The statistics and probability value associated with the Breusch-Pagan LM test

otherwise known as the Breusch-Pagan Godfrey test help determine whether there is evidence

of heteroscedasticity in the regression model. A low p-value (p<0.05) suggests evidence

against the null hypothesis in favour of the alternate hypothesis which indicates the presence

of heteroscedasticity in the regression model. With a p-value of 0.2135, there is sufficient

evidence to accept the null hypothesis, thus, conclude that the predictor variables in the

regression model are homoscedastic.

 42

4.3 Test of hypotheses

Each of the hypotheses in this study was tested based on the result obtained from the

panel multiple regression analysis. The result that relate to these hypotheses is as

summarized in table 4.5 below;

Table 4.5 Panel multiple regression results

Variable Coefficient Std. Error t-Statistic Prob.

C 2.418526 1.530853 1.579855 0.0005

AUDCSZ -0.374976 0.185083 -3.025985 0.0439
BODI -0.284378 1.641778 -3.673214 0.0016
CEOD 0.920980 0.376806 1.444177 0.2153

R-squared 0.474175 Mean dependent var 0.234700

Adjusted R-squared 0.391897 S.D. dependent var 1.889761
S.E. of regression 1.868956 Akaike info criterion 4.105163
Sum squared resid 824.3470 Schwarz criterion 4.163174
Log likelihood -488.6196 Hannan-Quinn criter. 4.128537
F-statistic 9.783545 Durbin-Watson stat 1.526249
Prob(F-statistic) 0.000510

Source: E-views 10.0 (Output in Appendix II)

The multiple regression line is as written below:

ETR = 2.418526-0.374976AUDCSz-0.284378BODI+0.920980CEOD + μ

Considering the regression results above, when the independent variables- Audit

committee size (AUDCSz), board independence (BODI) and CEO duality (CEOD) of listed

non-financial firms in Nigeria are held constant (equal Zero), the dependent variable–

Effective tax rate increased at a constant average of approximately 2.42%. However, a one

percent (1%) rise in audit committee size (AUDCSz) and board independence (BODI) of
 43

listed non-financial firms in Nigeria will decrease effective tax rate by approximately 0.37%

and 0.28% respectively while an increase in CEO duality by one percent (1%) increases

effective tax rate by approximately 0.92% indicating a decrease in aggressive tax sheltering

strategies. The Prob (F-statistics) of 0.000510 suggests that Audit committee size (AUDCSz),

board independence (BODI) and CEO duality (CEOD) of listed non-financial firms in

Nigeria have a combined significant effect on effective tax rate (ETR) at 5% significance

level.

4.3.1 Hypothesis one

Ho1: Audit committee size has no significant relationship with effective tax rate of listed

non-financial firms in Nigeria.

In order to test whether the variations in effective tax rate of listed non-financial firms

in Nigeria caused by audit committee size (AUDCSz) is significant. The T-test was carried

out at .05 significance level with Ttab of 2.06865 given at , . From the result in table 4.5
T0.05 24

above, the Tcal of 3.025985 is greater than Ttab given at , . Hence, the null hypothesis
T0.05 24

which states that audit committee size has no significant relationship with effective tax rate of

listed non-financial firms in Nigeria fails to hold, thus rejected, and the alternate hypothesis

accepted. The null hypothesis is further rejected given that at , its probability value (p-
T0.05,24

value = 0.0439) is less than 0.05.

4.3.2 Hypothesis two

Ho2: Board independence has no significant relationship with effective tax rate of listed

non-financial firms in Nigeria.

 44

In the same vein, the T-test was also considered in ascertaining whether the variations

in effective tax rate of listed non-financial firms in Nigeria caused by Board independence

(BODI) is significant. The T-test was carried out at .05 significance level with Ttab of

2.06865 given at , . From the result in table 4.5 above, the Tcal of 3.673214 is greater
T0.05 24

than Ttab given at T0.05,24. Hence, the null hypothesis which states that board independence has

no significant relationship with effective tax rate of listed non-financial firms in Nigeria fails

to hold, thus rejected, and the alternate hypothesis accepted. The null hypothesis is further

rejected given that at T0.05,24, its probability value (p-value = 0.0016) is less than 0.05.

4.3.3 Hypothesis three

Ho3: CEO duality has no significant relationship with effective tax rate of listed non-

financial firms in Nigeria.

In addition, the T-test was also considered in ascertaining whether the variations in

effective tax rate of listed non-financial firms in Nigeria caused by CEO duality (CEOD) is

significant. The T-test was carried out at .05 significance level with Ttab of 2.06865 given at

, . From the result in table 4.5 above, the Tcal of 1.444177 is less than Ttab given at
T0.05 24

, . Hence, the null hypothesis which states that CEO duality has no significant
T0.05 24

relationship with effective tax rate of listed non-financial firms in Nigeria holds, thus

accepted, and the alternate hypothesis rejected. The null hypothesis is further accepted given

that at T0.05,24, its probability value (p-value = 0.2153) is greater than 0.05.

4.4 Discussion of findings

4.4.1 Audit committee size and effective tax rate

 45

The study revealed that audit committee size has a significant negative relationship

(Coeff. = -0.374976{0.0439}) with effective tax rate of listed non-financial firms in Nigeria.

This finding suggests that the size of the audit committee within these non-financial firms

plays a crucial role in promoting aggressive tax sheltering strategies. A larger audit

committee is associated with a decrease in effective tax rates, indicating that more members

involved in monitoring financial activities and tax-related decisions often identify the

loopholes prevalent within the tax system. Specifically, a one percent (1%) increase in audit

committee size leads to a 0.37% decrease in effective tax rates. This finding highlights the

importance of ensuring that listed non-financial firms have robust and adequately sized audit

committees. By having a larger audit committee, companies can enhance their ability to

scrutinize tax-related activities, potentially reducing tax evasion and promoting ethical

behavior in tax reporting. This is in line with the findings of Ogbodo and Abusomwan (2021)

and that of Uniamikogbo, Bennee and Adeusi (2019). These studies established that the size

of board moves in the same direction with tax aggressiveness.

4.4.1 Board independence and effective tax rate

The second finding reveals that board independence is an essential factor in mitigating

aggressive tax sheltering practices. When the board consists of independent directors who are

not affiliated with the management, there is a significant decrease in effective tax rates. A one

percent (1%) increase in board independence is associated with a 0.28% decrease in effective

tax rates. This finding suggests that promoting board independence within listed non-

financial firms is crucial for effective tax governance. Independent directors can provide

unbiased oversight, ensuring that tax-related decisions are made in the best interest of the

company and its stakeholders by coming with valid ways of circumcising the tax system.

Therefore, regulators and policymakers should emphasize the appointment of independent

directors to enhance transparency and reduce the likelihood of tax aggressiveness. This is in
 46

agreement with the findings of Ogbodo and Abusomwan (2021). The estimation results

revealed that board independence have a negative coefficient and significant at 5%

suggesting that an increase in these board structure variables results in a reduction in the tax

paid/ pre-tax income ratio and this implies an increase in tax sheltering practices.

4.4.1 CEO duality and effective tax rate

The study also revealed that CEO duality has an insignificant positive relationship

(Coeff. = 0.920980{0.2153}) with effective tax rate of listed non-financial firms in Nigeria.

While CEO duality might not directly influence tax sheltering practices, it is still important

for companies to carefully consider the separation of the CEO and board chairman roles.

Separation of these positions can help maintain an appropriate system of checks and balances

and prevent conflicts of interest that may arise in tax-related decision-making processes. This

is both in consonance and deviance with the findings of Ezejiofor and Ezenwafor (2020)

which revealed that CEO duality is significant and has a positive coefficient on tax planning

of food and beverage companies in Nigeria indicating the possibility of tax avoidance

practices.
 47

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

This chapter summarizes the research findings, offer recommendations and

suggestions for further studies. It also discusses this present study’s key contributions to

knowledge.

5.1 Summary of findings

This present study examined the relationship between corporate monitoring

mechanisms and tax sheltering strategies of listed non-financial firms in Nigeria. The study

covered ten (10) years period (2013-2022) with particular emphasis on audit committee size,

Board independence and CEO duality. Effective tax rate applicable to these selected firms

served as a surrogate for tax sheltering strategies. Below is a summary of findings gathered

through a panel multiple regression analysis.

 48

1. Audit committee size has a significant negative relationship (Coeff. = -

0.374976{0.0439}) with effective tax rate of listed non-financial firms in Nigeria.

2. Board independence has a significant negative relationship (Coeff. = -

0.284378{0.0016}) with effective tax rate of listed non-financial firms in Nigeria.

3. CEO duality has an insignificant positive relationship (Coeff. = 0.920980{0.2153})

with effective tax rate of listed non-financial firms in Nigeria.

5.2 Conclusion

The Prob (F-statistics) of 0.000510 suggests that audit committee size (AUDCSz),

board independence (BODI) and CEO duality (CEOD) of listed non-financial firms in

Nigeria have a combined significant effect on effective tax rate (ETR) at 5% significance

level. Based on this, it is however concluded that corporate monitoring mechanisms play a

crucial role in shaping tax sheltering strategies and other tax related activities among listed

non-financial firms in Nigeria.

5.3 Recommendations

Based on the findings of this study, the following recommendations have been put forward.

1. Non-financial firms in Nigeria should ensure they have robust and adequately sized

audit committees that can provide effective oversight of financial and tax-related

activities.

2. Nigerian regulators and policymakers should emphasize the appointment of

independent directors to listed non-financial firms' Boards. This move can help

promote transparency and reduce the likelihood of aggressive tax sheltering practices.

3. Additionally, the separation of the CEO and board chairman roles can help maintain

an appropriate system of checks and balances in tax-related decision-making

processes.
 49

5.4 Suggestions for further studies

Other studies should consider the following aspects.

1. Explore the impact of audit committee size and board independence on other financial

outcomes, such as firm performance, profitability, and investment decisions.

2. Compare different industries and countries so as to provide a better and

comprehensive understanding of how corporate governance mechanisms affect tax

sheltering practices across various contexts.

5.5 Contributions to knowledge

1. This study provides new insights into the role of corporate governance mechanisms in

mitigating tax sheltering practices among listed non-financial firms in Nigeria.

2. It also highlights the significance of audit committee size and board independence in

promoting transparency and reducing tax evasion, contributing to the existing

literature on corporate governance and taxation in emerging economies.

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APPENDIX I
DATASET EMPLOYED
Table 4.1 Dataset employed
PBT ITx TOTAL NON- AUDCS
S/N COMPANY NAME SECTOR YEAR (N’m) (N’m) DIREC. EXEC ETR z BODI
1 Dangote Cement PLC Industrial goods 2013 200011 10252 13 11 0.05 6 0.85
Dangote Cement PLC Industrial goods 2014 184698 25188 12 10 0.14 6 0.83
Dangote Cement PLC Industrial goods 2015 188294 6971 14 10 0.04 6 0.71
Dangote Cement PLC Industrial goods 2016 180929 38071 14 12 0.21 7 0.86
Dangote Cement PLC Industrial goods 2017 289590 85342 14 12 0.29 8 0.86
Dangote Cement PLC Industrial goods 2018 300806 89519 15 11 0.30 8 0.73
Dangote Cement PLC Industrial goods 2019 250479 49958 15 11 0.20 7 0.73
Dangote Cement PLC Industrial goods 2020 373310 97242 16 12 0.26 7 0.75
Dangote Cement PLC Industrial goods 2021 538366 173927 16 12 0.32 8 0.75
Dangote Cement PLC Industrial goods 2022 524002 141691 15 12 0.27 8 0.80
 55

2 Berger paints PLC Industrial goods 2013 342767 85187 12 8 0.25 6 0.67
Berger paints PLC Industrial goods 2014 249258 100450 12 8 0.40 6 0.67
Berger paints PLC Industrial goods 2015 565212 234896 12 9 0.42 6 0.75
Berger paints PLC Industrial goods 2016 271770 47763 12 9 0.18 6 0.75
Berger paints PLC Industrial goods 2017 339456 93180 12 10 0.27 6 0.83
Berger paints PLC Industrial goods 2018 454328 133819 12 8 0.29 6 0.67
Berger paints PLC Industrial goods 2019 533099 84366 12 10 0.16 5 0.83
Berger paints PLC Industrial goods 2020 210903 64875 12 10 0.31 6 0.83
Berger paints PLC Industrial goods 2021 178089 42454 12 9 0.24 5 0.75
Berger paints PLC Industrial goods 2022 355579 146909 8 6 0.41 5 0.75
3 Premier Paints PLC Industrial goods 2013 -16002 5128 8 5 -0.32 6 0.63
Premier Paints PLC Industrial goods 2014 11676 3585 8 5 0.31 6 0.63
Premier Paints PLC Industrial goods 2015 -50839 -21342 9 6 0.42 6 0.67
Premier Paints PLC Industrial goods 2016 -32242 1314 9 6 -0.04 6 0.67
Premier Paints PLC Industrial goods 2017 -76395 22492 9 6 -0.29 7 0.67
Premier Paints PLC Industrial goods 2018 -72216 3080 8 5 -0.04 6 0.63
Premier Paints PLC Industrial goods 2019 -29698 13513 8 5 -0.46 6 0.63
Premier Paints PLC Industrial goods 2020 -30180 455 8 5 -0.02 5 0.63
Premier Paints PLC Industrial goods 2021 -20373 253 8 5 -0.01 5 0.63
Premier Paints PLC Industrial goods 2022 0 0 8 6 0.00 5 0.75
4 Lafarge Africa PLC Industrial goods 2013 64261549 3308304 13 10 0.05 5 0.77
Lafarge Africa PLC Industrial goods 2014 40358133 6537761 12 10 0.16 5 0.83
Lafarge Africa PLC Industrial goods 2015 29286847 2123878 12 10 0.07 5 0.83
Lafarge Africa PLC Industrial goods 2016 -22818718 -39717499 14 10 1.74 5 0.71
Lafarge Africa PLC Industrial goods 2017 -34032277 569132 12 10 -0.02 6 0.83
Lafarge Africa PLC Industrial goods 2018 -19508228 -10706502 12 9 0.55 6 0.75
Lafarge Africa PLC Industrial goods 2019 17892285 2374499 14 8 0.13 6 0.57
Lafarge Africa PLC Industrial goods 2020 37572131 6729995 12 10 0.18 6 0.83
Lafarge Africa PLC Industrial goods 2021 62252478 11248929 11 8 0.18 5 0.73
Lafarge Africa PLC Industrial goods 2022 69744701 16097245 12 10 0.23 5 0.83
5 Notore Chemicals PLC Industrial goods 2013 0 0 12 9 0.00 5 0.75
Notore Chemicals PLC Industrial goods 2014 -11653758 0 12 10 0.00 5 0.83
Notore Chemicals PLC Industrial goods 2015 -11871623 0 12 9 0.00 5 0.75
Notore Chemicals PLC Industrial goods 2016 -11835606 181256 12 10 -0.02 5 0.83
Notore Chemicals PLC Industrial goods 2017 -2148135 -10800569 12 10 5.03 5 0.83
Notore Chemicals PLC Industrial goods 2018 -3522965 -1616295 12 9 0.46 6 0.75
Notore Chemicals PLC Industrial goods 2019 -10250474 -4499883 12 10 0.44 6 0.83
Notore Chemicals PLC Industrial goods 2020 -13922574 -7525938 13 10 0.54 5 0.77
Notore Chemicals PLC Industrial goods 2021 -19738664 -10162622 12 10 0.51 5 0.83
Notore Chemicals PLC Industrial goods 2022 -16035172 -8872222 13 10 0.55 5 0.77
6 Beta Glass PLC Industrial goods 2013 2138784 578620 9 7 0.27 6 0.78
Beta Glass PLC Industrial goods 2014 3340660 950437 9 7 0.28 6 0.78
Beta Glass PLC Industrial goods 2015 3114795 1123668 9 7 0.36 6 0.78
Beta Glass PLC Industrial goods 2016 5215253 1415860 9 7 0.27 7 0.78
 56

Beta Glass PLC Industrial goods 2017 5854740 1739598 9 8 0.30 7 0.89
Beta Glass PLC Industrial goods 2018 7188181 2135376 10 9 0.30 8 0.90
Beta Glass PLC Industrial goods 2019 8012533 2432313 10 7 0.30 6 0.70
Beta Glass PLC Industrial goods 2020 5114594 1647924 8 6 0.32 6 0.75
Beta Glass PLC Industrial goods 2021 7438999 1981328 9 7 0.27 5 0.78
Beta Glass PLC Industrial goods 2022 6991177 2305763 9 7 0.33 5 0.78
7 CAP PLC Industrial goods 2013 2086993 670198 6 4 0.32 6 0.67
CAP PLC Industrial goods 2014 2442140 779715 6 4 0.32 6 0.67
CAP PLC Industrial goods 2015 2570021 830462 6 4 0.32 6 0.67
CAP PLC Industrial goods 2016 2296821 693464 6 4 0.30 6 0.67
CAP PLC Industrial goods 2017 2181711 682981 7 5 0.31 6 0.71
CAP PLC Industrial goods 2018 2597832 568489 7 5 0.22 6 0.71
CAP PLC Industrial goods 2019 2545735 803647 10 7 0.32 6 0.70
CAP PLC Industrial goods 2020 1805738 582614 8 5 0.32 5 0.63
CAP PLC Industrial goods 2021 1727498 604916 8 6 0.35 5 0.75
CAP PLC Industrial goods 2022 3444212 1068004 10 8 0.31 5 0.80
8 Grief Nig. PLC Industrial goods 2013 52469 21843 5 4 0.42 5 0.80
Grief Nig. PLC Industrial goods 2014 52469 21843 5 4 0.42 6 0.80
Grief Nig. PLC Industrial goods 2015 40149 15525 6 4 0.39 6 0.67
Grief Nig. PLC Industrial goods 2016 37597 10491 4 3 0.28 5 0.75
Grief Nig. PLC Industrial goods 2017 77554 28130 6 4 0.36 6 0.67
Grief Nig. PLC Industrial goods 2018 -245229 17360 6 4 -0.07 5 0.67
Grief Nig. PLC Industrial goods 2019 -311537 695 6 4 0.00 5 0.67
Grief Nig. PLC Industrial goods 2020 398528 48041 4 3 0.12 5 0.75
Grief Nig. PLC Industrial goods 2021 -31407 0 4 3 0.00 5 0.75
Grief Nig. PLC Industrial goods 2022 0 4 3 0.00 5 0.75
9 Cutix PLC Industrial goods 2013 229287 77864 8 6 0.34 5 0.75
Cutix PLC Industrial goods 2014 264837 57721 8 6 0.22 5 0.75
Cutix PLC Industrial goods 2015 202107 52898 8 6 0.26 5 0.75
Cutix PLC Industrial goods 2016 278114 87563 7 5 0.31 5 0.71
Cutix PLC Industrial goods 2017 370143 112646 7 5 0.30 5 0.71
Cutix PLC Industrial goods 2018 661563 221268 7 5 0.33 5 0.71
Cutix PLC Industrial goods 2019 679331 202262 7 5 0.30 5 0.71
Cutix PLC Industrial goods 2020 585505 192450 7 5 0.33 5 0.71
Cutix PLC Industrial goods 2021 899827 305804 9 8 0.34 5 0.89
Cutix PLC Industrial goods 2022 1157642 371335 9 8 0.32 5 0.89
10 Meyer PLC Industrial goods 2013 51189 4121 9 6 0.08 5 0.67
Meyer PLC Industrial goods 2014 -37362 -787 9 6 0.02 5 0.67
Meyer PLC Industrial goods 2015 60459 7599 9 6 0.13 5 0.67
Meyer PLC Industrial goods 2016 -215832 3364 8 6 -0.02 5 0.75
Meyer PLC Industrial goods 2017 -264809 3035 8 6 -0.01 5 0.75
Meyer PLC Industrial goods 2018 182302 -136885 7 5 -0.75 5 0.71
Meyer PLC Industrial goods 2019 -7176 6422 7 5 -0.89 5 0.71
Meyer PLC Industrial goods 2020 1638380 520374 7 6 0.32 5 0.86
 57

Meyer PLC Industrial goods 2021 60266 26598 7 5 0.44 5 0.71

Meyer PLC Industrial goods 2022 -17239 -410852 7 5 23.83 5 0.71
11 BUA Cement PLC Industrial goods 2013 2105835 546805 8 6 0.26 6 0.75
BUA Cement PLC Industrial goods 2014 2476771 558410 8 6 0.23 6 0.75
BUA Cement PLC Industrial goods 2015 1549596 348488 9 8 0.22 5 0.89
BUA Cement PLC Industrial goods 2016 1740522 486717 9 8 0.28 5 0.89
BUA Cement PLC Industrial goods 2017 4203153 979300 9 8 0.23 5 0.89
BUA Cement PLC Industrial goods 2018 39166582 -24905420 9 8 -0.64 5 0.89
BUA Cement PLC Industrial goods 2019 66224501 5614216 7 5 0.08 5 0.71
BUA Cement PLC Industrial goods 2020 78873498 6529162 8 6 0.08 5 0.75
10287332
BUA Cement PLC Industrial goods 2021 5 12794314 8 5 0.12 5 0.63
12015405
BUA Cement PLC Industrial goods 2022 0 19143424 8 5 0.16 5 0.63
12 Austin Laz & Co PLC Industrial goods 2013 18965 11402 6 5 0.60 6 0.83
Austin Laz & Co PLC Industrial goods 2014 -158439 503 6 5 0.00 6 0.83
Austin Laz & Co PLC Industrial goods 2015 -58499 593 6 5 -0.01 6 0.83
Austin Laz & Co PLC Industrial goods 2016 -146038 88 6 5 0.00 6 0.83
Austin Laz & Co PLC Industrial goods 2017 494 179 6 5 0.36 6 0.83
Austin Laz & Co PLC Industrial goods 2018 -15341 889 6 5 -0.06 6 0.83
Austin Laz & Co PLC Industrial goods 2019 -84217 151 6 5 0.00 5 0.83
Austin Laz & Co PLC Industrial goods 2020 -142139 0 6 5 0.00 5 0.83
Austin Laz & Co PLC Industrial goods 2021 44568 0 6 5 0.00 6 0.83
Austin Laz & Co PLC Industrial goods 2022 44568 0 7 5 0.00 6 0.71
13 Fidson Healthcare PLC Healthcare 2013 249591 94611 8 5 0.38 6 0.63
Fidson Healthcare PLC Healthcare 2014 870812 238987 8 5 0.27 6 0.63
Fidson Healthcare PLC Healthcare 2015 838039 93661 8 5 0.11 6 0.63
Fidson Healthcare PLC Healthcare 2016 443787 127025 8 5 0.29 6 0.63
Fidson Healthcare PLC Healthcare 2017 1578547 517758 9 5 0.33 6 0.56
Fidson Healthcare PLC Healthcare 2018 160867 258314 9 6 1.61 6 0.67
Fidson Healthcare PLC Healthcare 2019 575666 168478 8 6 0.29 5 0.75
Fidson Healthcare PLC Healthcare 2020 1772221 567182 7 5 0.32 6 0.71
Fidson Healthcare PLC Healthcare 2021 4717644 997731 10 6 0.21 5 0.60
Fidson Healthcare PLC Healthcare 2022 5781473 1594315 11 6 0.28 5 0.55
14 Glaxosmithkline PLC Healthcare 2013 4314829 1395659 9 7 0.32 6 0.78
Glaxosmithkline PLC Healthcare 2014 2752216 903374 9 6 0.33 6 0.67
Glaxosmithkline PLC Healthcare 2015 1056880 192467 9 6 0.18 6 0.67
Glaxosmithkline PLC Healthcare 2016 185891 -2192254 9 7 -11.79 6 0.78
Glaxosmithkline PLC Healthcare 2017 1124269 637836 9 7 0.57 6 0.78
Glaxosmithkline PLC Healthcare 2018 1160154 542530 8 6 0.47 5 0.75
Glaxosmithkline PLC Healthcare 2019 1169331 252227 8 6 0.22 6 0.75
Glaxosmithkline PLC Healthcare 2020 1000222 377992 8 6 0.38 5 0.75
Glaxosmithkline PLC Healthcare 2021 945752 286941 8 6 0.30 5 0.75
Glaxosmithkline PLC Healthcare 2022 1241233 470087 8 6 0.38 5 0.75
15 May and Baker PLC Healthcare 2013 101174 91719 9 6 0.91 5 0.67
 58

May and Baker PLC Healthcare 2014 127931 34766 9 6 0.27 5 0.67
May and Baker PLC Healthcare 2015 127325 72793 9 6 0.57 5 0.67
May and Baker PLC Healthcare 2016 337670 386382 9 5 1.14 5 0.56
May and Baker PLC Healthcare 2017 875977 229027 9 5 0.26 6 0.56
May and Baker PLC Healthcare 2018 875977 229027 9 6 0.26 6 0.67
May and Baker PLC Healthcare 2019 849786 475226 10 6 0.56 6 0.60
May and Baker PLC Healthcare 2020 1187739 283762 10 6 0.24 6 0.60
May and Baker PLC Healthcare 2021 1234450 323610 9 6 0.26 6 0.67
May and Baker PLC Healthcare 2022 2047322 565367 9 5 0.28 6 0.56
16 Morison Indust. PLC Healthcare 2013 -14100 7965 9 6 -0.56 6 0.67
Morison Indust. PLC Healthcare 2014 -88309 -5978 9 7 0.07 6 0.78
Morison Indust. PLC Healthcare 2015 -44106 64394 9 7 -1.46 6 0.78
Morison Indust. PLC Healthcare 2016 -78106 479 9 7 -0.01 5 0.78
Morison Indust. PLC Healthcare 2017 -181178 0 6 4 0.00 5 0.67
Morison Indust. PLC Healthcare 2018 -183634 6448 6 4 -0.04 5 0.67
Morison Indust. PLC Healthcare 2019 -104289 431 7 5 0.00 5 0.71
Morison Indust. PLC Healthcare 2020 -106927 388 7 5 0.00 5 0.71
Morison Indust. PLC Healthcare 2021 -93462 469 6 4 -0.01 4 0.67
Morison Indust. PLC Healthcare 2022 -106410 1071 6 4 -0.01 4 0.67
17 Neimeth intern. PLC Healthcare 2013 182135 51556 10 8 0.28 5 0.80
Neimeth intern. PLC Healthcare 2014 -198173 30362 10 8 -0.15 5 0.80
Neimeth intern. PLC Healthcare 2015 -315772 19912 10 8 -0.06 5 0.80
Neimeth intern. PLC Healthcare 2016 95361 30268 10 8 0.32 5 0.80
Neimeth intern. PLC Healthcare 2017 -404920 6564 11 8 -0.02 6 0.73
Neimeth intern. PLC Healthcare 2018 166460 18444 11 8 0.11 6 0.73
Neimeth intern. PLC Healthcare 2019 304439 84292 11 7 0.28 6 0.64
Neimeth intern. PLC Healthcare 2020 297388 85112 11 7 0.29 6 0.64
Neimeth intern. PLC Healthcare 2021 365284 94708 11 7 0.26 5 0.64
Neimeth intern. PLC Healthcare 2022 -388054 18245 13 8 -0.05 5 0.62
18 Pharma-Deko PLC Healthcare 2013 -127993 -6811 8 6 0.05 5 0.75
Pharma-Deko PLC Healthcare 2014 150171 49164 9 6 0.33 5 0.67
Pharma-Deko PLC Healthcare 2015 701674 42410 9 6 0.06 5 0.67
Pharma-Deko PLC Healthcare 2016 291813 42410 8 6 0.15 6 0.75
Pharma-Deko PLC Healthcare 2017 39314 26709 8 6 0.68 6 0.75
Pharma-Deko PLC Healthcare 2018 -255983 9277 8 6 -0.04 5 0.75
Pharma-Deko PLC Healthcare 2019 -276460 2423 9 6 -0.01 5 0.67
Pharma-Deko PLC Healthcare 2020 -324054 1212 9 6 0.00 5 0.67
Pharma-Deko PLC Healthcare 2021 -137900 3709 8 6 -0.03 5 0.75
Pharma-Deko PLC Healthcare 2022 -141609 0 8 6 0.00 5 0.75
19 Chellarams PLC Conglomerates 2013 241322 150915 6 4 0.63 5 0.67
Chellarams PLC Conglomerates 2014 -68625 5967 6 4 -0.09 5 0.67
Chellarams PLC Conglomerates 2015 -2622640 538452 6 4 -0.21 6 0.67
Chellarams PLC Conglomerates 2016 235051 78032 6 4 0.33 6 0.67
Chellarams PLC Conglomerates 2017 334055 0 6 4 0.00 6 0.67
 59

Chellarams PLC Conglomerates 2018 269904 69193 6 4 0.26 5 0.67

Chellarams PLC Conglomerates 2019 2728423 5487250 5 4 2.01 5 0.80
Chellarams PLC Conglomerates 2020 -3845247 84808 6 4 -0.02 6 0.67
Chellarams PLC Conglomerates 2021 -3582487 -168444 5 4 0.05 6 0.80
Chellarams PLC Conglomerates 2022 1155936 273721 5 4 0.24 6 0.80
20 Custodian Invest. PLC Conglomerates 2013 4336649 733156 8 6 0.17 5 0.75
Custodian Invest. PLC Conglomerates 2014 5097338 1058079 8 6 0.21 5 0.75
Custodian Invest. PLC Conglomerates 2015 5731738 1531284 9 7 0.27 5 0.78
Custodian Invest. PLC Conglomerates 2016 7389822 2058846 9 7 0.28 6 0.78
Custodian Invest. PLC Conglomerates 2017 8932671 1616006 9 7 0.18 6 0.78
Custodian Invest. PLC Conglomerates 2018 9500710 2387519 9 7 0.25 6 0.78
Custodian Invest. PLC Conglomerates 2019 8069573 2057794 8 6 0.26 6 0.75
Custodian Invest. PLC Conglomerates 2020 13686047 869935 8 6 0.06 5 0.75
Custodian Invest. PLC Conglomerates 2021 12322233 2151302 8 6 0.17 5 0.75
Custodian Invest. PLC Conglomerates 2022 13776433 2614463 8 6 0.19 5 0.75
21 John Holt PLC Conglomerates 2013 297 171 8 6 0.58 5 0.75
John Holt PLC Conglomerates 2014 427 -164 8 6 -0.38 5 0.75
John Holt PLC Conglomerates 2015 -171 83 9 7 -0.49 5 0.78
John Holt PLC Conglomerates 2016 204 107 9 7 0.52 6 0.78
John Holt PLC Conglomerates 2017 -223 505 9 7 -2.26 6 0.78
John Holt PLC Conglomerates 2018 160 -5 9 7 -0.03 6 0.78
John Holt PLC Conglomerates 2019 236 18 8 6 0.08 6 0.75
John Holt PLC Conglomerates 2020 -319 22 8 6 -0.07 6 0.75
John Holt PLC Conglomerates 2021 -553 -45 9 6 0.08 7 0.67
John Holt PLC Conglomerates 2022 72 -469 9 6 -6.51 7 0.67
22 SCOA NIG. PLC Conglomerates 2013 145671 34933 8 6 0.24 6 0.75
SCOA NIG. PLC Conglomerates 2014 84669 -92333 8 6 -1.09 6 0.75
SCOA NIG. PLC Conglomerates 2015 -1255526 10367 8 5 -0.01 6 0.63
SCOA NIG. PLC Conglomerates 2016 2258195 626421 8 6 0.28 6 0.75
SCOA NIG. PLC Conglomerates 2017 -1897172 12131 8 5 -0.01 5 0.63
SCOA NIG. PLC Conglomerates 2018 -507605 -461725 8 5 0.91 5 0.63
SCOA NIG. PLC Conglomerates 2019 69749 -249427 8 6 -3.58 6 0.75
SCOA NIG. PLC Conglomerates 2020 -77263 -458770 8 5 5.94 6 0.63
SCOA NIG. PLC Conglomerates 2021 526461 454064 7 5 0.86 6 0.71
SCOA NIG. PLC Conglomerates 2022 -525080 66315 8 5 -0.13 5 0.63
23 Transcorp Hilton Conglomerates 2013 9032151 2074249 9 7 0.23 6 0.78
Transcorp Hilton Conglomerates 2014 7731598 4427338 9 7 0.57 6 0.78
Transcorp Hilton Conglomerates 2015 3319529 1287972 9 7 0.39 6 0.78
Transcorp Hilton Conglomerates 2016 -5928348 -4801350 9 7 0.81 6 0.78
Transcorp Hilton Conglomerates 2017 12305547 1698271 11 8 0.14 5 0.73
Transcorp Hilton Conglomerates 2018 22402087 1775420 11 8 0.08 5 0.73
Transcorp Hilton Conglomerates 2019 7897624 4192560 11 8 0.53 6 0.73
Transcorp Hilton Conglomerates 2020 1608591 -2183517 11 8 -1.36 6 0.73
Transcorp Hilton Conglomerates 2021 27998554 4167102 11 8 0.15 6 0.73
 60

Transcorp Hilton Conglomerates 2022 30276333 13436609 11 8 0.44 6 0.73

24 UAC LTD Conglomerates 2013 13935016 4061530 8 6 0.29 5 0.75
UAC LTD Conglomerates 2014 14096932 3370163 8 6 0.24 5 0.75
UAC LTD Conglomerates 2015 7733077 2570339 8 6 0.33 5 0.75
UAC LTD Conglomerates 2016 7774880 2108342 8 6 0.27 5 0.75
UAC LTD Conglomerates 2017 3246120 1921733 8 6 0.59 5 0.75
UAC LTD Conglomerates 2018 -5512401 3959969 8 6 -0.72 5 0.75
UAC LTD Conglomerates 2019 7456259 2110943 9 7 0.28 6 0.78
UAC LTD Conglomerates 2020 5120845 1662581 9 7 0.32 6 0.78
UAC LTD Conglomerates 2021 4108373 1521319 10 8 0.37 6 0.80
UAC LTD Conglomerates 2022 -4365316 -372321 9 7 0.09 6 0.78
Source: Annual reports of listed non-financial goods firms in Nigeria (2013-2022)

APPENDIX II
DATA ANALYSIS RESULTS
Date: 12/26/23
Time: 22:52
Sample: 2013 2022

ETR AUDCSZ BODI CEOD

Mean 0.234700 5.575000 0.733033 0.125000

Median 0.239439 6.000000 0.750000 0.000000
Maximum 23.83270 8.000000 0.900000 1.000000
Minimum -11.79322 4.000000 0.545455 0.000000
Std. Dev. 1.889761 0.674242 0.073962 0.331410
Skewness 7.029363 0.997933 -0.124957 2.267787
Kurtosis 110.3597 4.766318 2.673741 6.142857
Jarque-Bera 117237.5 71.03355 1.689017 304.4898
Probability 0.000000 0.000000 0.429769 0.000000
 61

Sum 56.32791 1338.000 175.9280 30.00000

Sum Sq. Dev. 853.5157 108.6500 1.307413 26.25000
Observations 240 240 240 240

Dependent Variable: ETR

Method: Panel Least Squares
Date: 12/26/23 Time: 22:55
Sample: 2013 2022
Periods included: 10
Cross-sections included: 24
Total panel (balanced) observations: 240

Variable Coefficient Std. Error t-Statistic Prob.

C 2.418526 1.530853 1.579855 0.0005

AUDCSZ -0.374976 0.185083 -3.025985 0.0439
BODI -0.284378 1.641778 -3.673214 0.0016
CEOD 0.920980 0.376806 1.444177 0.2153

R-squared 0.474175 Mean dependent var 0.234700

Adjusted R-squared 0.391897 S.D. dependent var 1.889761
S.E. of regression 1.868956 Akaike info criterion 4.105163
Sum squared resid 824.3470 Schwarz criterion 4.163174
Log likelihood -488.6196 Hannan-Quinn criter. 4.128537
F-statistic 9.783545 Durbin-Watson stat 1.526249
Prob(F-statistic) 0.000510

Residual Cross-Section Dependence Test

Null hypothesis: No cross-section dependence (correlation) in residuals
Equation: Untitled
Periods included: 10
Cross-sections included: 24
Total panel observations: 240
Note: non-zero cross-section means detected in data
Cross-section means were removed during computation of correlations

Test Statistic d.f. Prob.

Breusch-Pagan LM 294.3964 276 0.2135

Pesaran scaled LM -0.238507 0.8115
Pesaran CD 1.107607 0.2680
 62

Variance Inflation Factors

Date: 12/26/23 Time: 23:01
Sample: 2013 2022
Included observations: 240

Coefficient Uncentered Centered

Variable Variance VIF VIF

C 2.343511 161.0201 NA
AUDCSZ 0.034256 74.21933 1.065530
BODI 2.695435 100.5241 1.008890
CEOD 0.141983 1.219434 1.067005