• 도시과학
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• 제6권2호
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• pp.35-47
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• 2017

Tax evasion is increasing, but efficiency of tax administration is evaluated as improving. This is because the taxation cost, which is a measure to judge the efficiency of the tax administration, does not consider the tax evasion effect at all. This method of estimating the cost of taxation is a dispute that neglects the role of taxation authorities in tax evasion. The existing study focuses on the development of a tax evasion model focused on maximizing the utility through the tax evasion of the taxpayer as the tax evasion approaches the individual 's deviant problem. However, this has the aspect of making the role of the tax authorities in tax evasion negative. This study empirically derived the optimal size of tax administration in Korea by using tax collection cost and tax cooperation cost. Also, it is meaningful to consider the role of the taxation authorities in tax evasion and to derive the optimal taxation cost model by estimating the decrease in tax evasion due to the taxation expenditure of the tax authorities. In order to derive the optimal size of tax administration in Korea, taxation cost and tax cooperation cost are derived by classifying tax officials. The optimal taxation cost model was derived by estimating the taxation expenditure related to tax evasion. This study is meaningful to make it possible to emphasize the role of tax authorities in studying future tax evasion by studying the effect of taxation expenditure on tax evasion.

• The Journal of Asian Finance, Economics and Business
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• 제6권2호
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• pp.15-24
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• 2019

This study analyzes the effect of the capital structure of Korean manufacturing firms on default risk based on Moody's KMV option pricing model where the probability of default is obtained by measuring the distance to default as a covariant in logit model developed by Merton (1974). Based on the panel data of manufacturing firms, this study achieves its primary objective, using a fixed effect regression model and examines the effect of a firm's capital structure on default risk amongst publicly listed firms on Korea exchange during 2005-2016. Empirical results obtained suggest that the rise in short-term debt to assets leads to increase the risk of default whereas the increase in long-term debt to assets leads to decrease the default risk. The benefits of short-term debt financing over a short-term period fade out in the presence of information asymmetry. However, long-term debt financing overcomes the information asymmetry and enjoys the paybacks of tax advantage associated with long-term debt. Additionally, size, tangibility and interest coverage ratio are also the important determinants of default risk. Findings support the trade-off theory of capital structure and recommend the optimal use of long-term debt in a firm's capital structure.