The Effect of Transfer Pricing, Earnings Management, and Leverage on Tax Avoidance with Institutional Ownership as Moderator
DOI:
https://doi.org/10.54518/ebh.5.5.2026.1737Keywords:
Earnings Management, Institutional Ownership, Leverage, Tax Avoidance, Transfer PricingAbstract
This study aims to examine and analyze the effect of transfer pricing, earnings management, and leverage on tax avoidance, as well as to test the ability of institutional ownership to moderate the effects of transfer pricing, earnings management, and leverage on tax avoidance. This study employs a quantitative approach with purposive sampling, yielding 198 observations from manufacturing companies listed on the Indonesia Stock Exchange during 2021–2023. Data were analyzed using descriptive statistics, classical assumption tests, multiple linear regression, and Moderated Regression Analysis (MRA). The partial results indicate that transfer pricing has a negative but insignificant effect on tax avoidance. Earnings management has a positive but insignificant effect on tax avoidance. Meanwhile, leverage has a positive and significant effect on tax avoidance. The moderation test results reveal that institutional ownership fails to moderate the effects of both transfer pricing and earnings management on tax avoidance. However, institutional ownership is proven to significantly strengthen the effect of leverage on tax avoidance. The findings imply that tax efficiency through debt instruments (tax shield), supported by institutional shareholding monitoring, serves as the primary determinant of tax avoidance practices in the Indonesian manufacturing sector.
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