Tax avoidance, managerial ownership, and agency conflicts

Nopparat Wongsinhirun, Pattanaporn Chatjuthamard, Pandej Chintrakarn and Pornsit Jiraporn

Finance Research Letters, 2024, vol. 61, issue C

Abstract: We examine how corporate tax avoidance is influenced by managerial ownership. Our results, based on a large sample of nearly 30,000 observations across a quarter of a century, demonstrate that firms where managers hold more shares exhibit less tax avoidance. Our findings corroborate the notion that corporate tax avoidance is primarily motivated by agency conflicts and is significantly mitigated by higher managerial ownership, which brings managers and shareholders’ interests into better alignment. Further analysis corroborates the results, i.e., propensity score matching, an instrumental variable analysis, and using alternative measures of tax avoidance.

Keywords: Tax avoidance; Managerial ownership; Agency conflicts; Agency theory; Tax aggressiveness (search for similar items in EconPapers)
JEL-codes: D22 G32 H25 M1 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:61:y:2024:i:c:s1544612323013090

DOI: 10.1016/j.frl.2023.104937

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