The effect of corporate governance mechanisms on tax planning during financial crisis: an empirical study of companies listed on the Athens stock exchange

Evangelos Chytis (), Stergios Tasios () and Ioannis Filos ()
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Evangelos Chytis: University of Ioannina
Stergios Tasios: University of Ioannina
Ioannis Filos: Panteion University of Social and Political Sciences

International Journal of Disclosure and Governance, 2020, vol. 17, issue 1, No 3, 30-38

Abstract: Abstract While tax burden is always one of the primary concerns for corporate management and finance, it is questionable whether tax has always been among the core factors of corporate governance. This study aims to explore the effect of corporate governance on tax planning during the adverse circumstances created by the economic crisis. The effective tax rates of a sample of 55 non-financial companies listed on the Athens stock exchange (ASE) during the 2011–2015 period were used as a proxy of tax planning and were regressed on corporate governance characteristics, controlling for firm specific attributes. Results showed a significant positive association of board independence with tax planning and a significant negative association with chief executive officer (CEO) duality and firm size. The remaining corporate governance and firm variables which included board size, audit firm size, ownership concentration, leverage and liquidity were not found to exert a significant influence on corporate tax planning of listed companies in Greece. Our results shed light on the relationship of governance with corporate tax planning in periods of financial distress, and may be of particular interest for market participants, investors, tax authorities and policy makers in their efforts to improve the efficiency of the tax system and public revenue.

Keywords: ETR; Ownership concentration; Board size; Board independence; CEO duality; Audit firm size; ASE (search for similar items in EconPapers)
JEL-codes: M41 M42 M48 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1057/s41310-020-00072-3

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