Can institutional investors shape tax efficiency? Evidence from green accounting, capital intensity, and deferred tax strategies in emerging markets

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Abstract

Taxation serves as a cornerstone of national development, underpinning the government’s capacity to fund public services, infrastructure, and social programs (Ekawati et al., 2025; El Merhebi & El Tanbour, 2025; Ola, 2024; Mbama & Mfelam, 2025). In Indonesia, all income-earning citizens are legally obligated to contribute taxes, with the taxation sector consistently comprising the majority of state revenue (Khan & Nuryanah, 2023). This study investigates the influence of institutional ownership on corporate effective tax rates (ETR), incorporating the roles of green accounting practices, capital intensity, and deferred tax liabilities. Employing a quantitative approach, the research utilizes secondary data from 219 manufacturing firms listed on the Indonesia Stock Exchange (IDX) between 2019 and 2023, selected through purposive sampling. Data were extracted from annual and sustainability reports. The findings reveal that green accounting and deferred tax liabilities significantly affect ETR, whereas capital intensity does not exhibit a meaningful impact. Furthermore, institutional ownership strengthens the relationship between both green accounting and deferred tax liabilities with ETR, but does not moderate the effect of capital intensity. These results offer practical insights for firms in optimizing tax strategies and for investors in evaluating corporate fiscal policies. From a regulatory perspective, the study contributes to the development of tax policies that promote transparency and corporate accountability. The novelty of this research lies in its integrated examination of environmental accounting, asset structure, and tax planning, moderated by institutional ownership, an approach rarely explored within the manufacturing sector of emerging markets.

Keywords: Effective Tax Rate, Institutional Ownership, Green Accounting, Capital Intensity, Emerging Markets, Manufacturing Firms

Authors’ individual contribution: Conceptualization — J.E.P., A.I.F., and H.G.F.; Methodology — J.E.P., D.S., and H.G.F.; Validation — D.S. and A.I.F.; Writing — Original Draft — J.E.P. and H.G.F.; Writing — Review & Editing — J.E.P., A.I.F., and H.G.F.; Supervision — D.S. and H.G.F.; Funding Acquisition — J.E.P.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G32, G34, M41, H25, Q56

Received: 11.09.2025
Revised: 12.12.2025; 04.02.2026
Accepted: 19.02.2026
Published online: 23.02.2026

How to cite this paper: Pambudi, J. E., Sunaryo, D., Fitriana, A. I., & Febrianto, H. G. (2026). Can institutional investors shape tax efficiency? Evidence from green accounting, capital intensity, and deferred tax strategies in emerging markets. Corporate and Business Strategy Review, 7(2), 16–24. https://doi.org/10.22495/cbsrv7i2art2