• Dr.N.Sakthivel
• P.Somasundaram

The present paper attempts to analyze whether firm value of pharmaceutical companies under manufacturing sector and hotel companies under service sector is affected by corporate taxation or not. The study is based on secondary information such as financial statements of the selected companies. The study period is from 2001-02 to 2016-17. Tobin Q is used as proxy for measuring firm value. The tax variables are statutory tax, effective tax and tax savings. Pearson product moment correlation is used to measure relationship between firm value and tax variables. The status of firm value is explored by descriptive analysis. The effect of tax on firm value after partial out the effect of firm characteristics is ascertained by multiple regression analysis. The firm characteristics used here are financial risk, growth, size, tangibility, liquidity, non-debt tax shield. It is found that firm value (Tobin Q) is moderately related to statutory tax in pharmaceutical manufacturing companies and such relationship is identified when companies in both sectors are pooled together but same is not true in the case of hotel service companies. However, firm value of hotel service companies is negatively correlated with deferred tax at moderate level. At the same time, there is no unique impact of statutory tax on firm value of companies in both sectors. On the other hand, effective tax has positive effect and tax saving has negative effect on firm value of hotel service companies.

Tobin Q, Statutory tax, Effective tax, Tax savings and Firm characteristics

"CORPORATE TAXATION AND VALUATION OF FIRMS UNDER MANUFACTURING AND SERVICE SECTOR", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 6, page no.577-583, June 2019, Available :http://www.jetir.org/papers/JETIR1907681.pdf

"CORPORATE TAXATION AND VALUATION OF FIRMS UNDER MANUFACTURING AND SERVICE SECTOR", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 6, page no. pp577-583, June 2019, Available at : http://www.jetir.org/papers/JETIR1907681.pdf