ESG AND TAX AVOIDANCE: THE MODERATING ROLE OF BOARD GENDER DIVERSITY IN INDONESIAN ENERGY FIRMS
DOI:
https://doi.org/10.36563/4s8nwh74Keywords:
ESG Disclosure, Tax Avoidance, Board Gender Diversity, Energy Firms, IndonesiaAbstract
This study examines the relationship between environmental, social, and governance (ESG) disclosure and tax avoidance and investigates the moderating role of board gender diversity among Indonesian energy firms. The study uses an unbalanced panel of 42 energy firms listed on the Indonesia Stock Exchange during 2019–2024, comprising 241 firm-year observations. ESG disclosure is measured using a 42-item disclosure index constructed through content analysis of annual, sustainability, and integrated reports. Board gender diversity is measured as the proportion of female directors relative to the total number of directors. Tax avoidance is primarily proxied by the effective tax rate (ETR), while the cash effective tax rate (CETR) is employed for robustness testing. The hypotheses are tested using pooled ordinary least squares with standard errors clustered at the firm level and year effects. The results show that broader ESG disclosure is associated with higher ETR, indicating lower tax avoidance. The interaction between ESG disclosure and board gender diversity is also positive and statistically significant, indicating that the association between ESG disclosure and lower tax avoidance becomes stronger as female representation on the board increases. The findings remain consistent when CETR is used as an alternative tax avoidance measure. These results highlight the relevance of board gender diversity in understanding the relationship between sustainability disclosure and corporate fiscal behavior.
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