Do family firms engage in less tax avoidance than non-family firms? The corporate opacity perspective

Cheng-Hsun Lee and Sudipta Bose

Journal of Contemporary Accounting and Economics, 2021, vol. 17, issue 2

Abstract: We examine the moderating effect of corporate opacity on the relationship between family firms and tax avoidance. We find, ceteris paribus, that family firms and tax avoidance are negatively associated. However, the negative association is attenuated when corporate opacity increases. Our results indicate that corporate opacity affects firms’ tax avoidance, with this effect stronger for family firms than for non-family firms. We also find that tax avoidance by and corporate opacity of family firms are negatively associated with firm valuation. These results are consistent with the opportunistic perspective that family firms engage in more tax avoidance than non-family firms when corporate opacity is higher.

Keywords: Corporate opacity; Tax avoidance; Family firms; Type II agency conflict (search for similar items in EconPapers)
JEL-codes: G32 H26 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:17:y:2021:i:2:s1815566921000217

DOI: 10.1016/j.jcae.2021.100263

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