ESG Disclosure and the Leverage–Tax Planning Nexus: Evidence from Developing ASEAN Markets

Yusuf Heri Prasetyo; Hersugondo Hersugondo

doi:10.61255/jeemba.v4i6.2421

Authors

Yusuf Heri Prasetyo Universitas Diponegoro
Hersugondo Hersugondo

DOI:

https://doi.org/10.61255/jeemba.v4i6.2421

Keywords:

ESG disclosure, leverage, liquidity, profitability, tax planning

Abstract

Purpose – This study examines the associations of profitability, liquidity, and leverage with positive book-tax differences (BTD) and tests whether environmental, social, and governance (ESG) disclosure moderates those associations among selected listed firms in developing ASEAN countries.

Design/methodology/approach – The balanced panel includes 101 firms and 404 firm-year observations for 2021–2024. Random-effects regressions with firm-clustered standard errors were estimated using ROE, CUR, DER, the Bloomberg ESG Disclosure Score, their interaction terms, and controls for size and tangibility.

Findings – ROE was positively associated with BTD (β = 0.3298, p < 0.001), and DER was negatively associated with BTD (β = -0.0209, p < 0.001); CUR was not significant. ESG disclosure did not significantly moderate the profitability or liquidity associations, but it attenuated the negative leverage association (DER × ESGD: β = 0.0006, p = 0.016).

Originality/value – The study examines ESG disclosure as a condition on separate financial associations rather than only as a direct correlate of tax behavior. Interpretation is limited by the positive-BTD sample, the accounting components of the variables, and the observational design.

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