The burden of attention: CEO publicity and tax avoidance

Tinghua Duan, Rong Ding, Wenxuan Hou and John Ziyang Zhang

Journal of Business Research, 2018, vol. 87, issue C, 90-101

Abstract: We use search volume index (SVI) for a CEO's name and stock ticker from Google Trends to measure CEO publicity, and examine the competing hypotheses on its relation to tax avoidance. On the one hand, CEOs who receive more attention from retail investors may engage in tax evasion activities to meet investors' performance expectations; on the other hand, they are more concerned with public image and avoiding being labeled as tax avoiders. Based on the CEOs of S&P 500 firms between 2004 and 2011, our finding supports the former and shows that CEOs with higher publicity manage to have a lower effective tax rate and cash effective tax rate. Such effect is moderated by board independence. Finally, firms with higher CEO publicity pay auditors higher tax fees, suggesting that these CEOs tend to use more tax planning services from auditors.

Keywords: CEO publicity; CEOs; Tax rate; Google trends; Search volume index; Tax avoidance (search for similar items in EconPapers)
JEL-codes: G30 H26 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:87:y:2018:i:c:p:90-101

DOI: 10.1016/j.jbusres.2018.02.010

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