Author(s): Won Park, Chung Gyu Byun
This study mainly aims to examine the effect of corporate size on the relationship between tax burden rate and future performance of registered enterprises on Korea Securities Dealers Automated Quotations (KOSDAQ). It also intends to examine whether membership in a corporate group affects the relationship between the tax burden rate and future performance. In this paper, the cash corporate tax rate for each period is measured as the tax burden ratio, and the results are presented using the net asset return and total asset income before tax as dependent variables. The study period is from 2016 to 2018. The control variables of the model include debt ratio, sales growth rate, foreign ownership ratio, and current performance. The results of the analysis indicate that the tax burden rate of small- and medium-sized enterprises had a negative effect on future performance. However, they provided evidence that the tax burden rate of large enterprises had no relationship with future performance. In addition, it was revealed that the tax burden ratio of companies not belonging to the corporate group has a significant negative relationship with future performance. Meanwhile, companies belonging to the corporate group did not disclose the relationship between the tax burden rate and future performance. These results imply that the size of a company and corporate group membership are important factors in determining the relationship between the tax burden rate and future performance for KOSDAQ-listed companies.