Do female directors make corporate tax strategies more conservative? Evidence from Chinese listed companies

Xu Weichen and Igor A. Mayburov

Journal of Tax Reform, 2025, vol. 11, issue 2, 451-468

Abstract: Gender dynamics in decision-making, especially regarding tax avoidance, are critical to understanding how different leadership styles affect corporate governance. The goal of this study is to explore how the proportion of female executives in China’s A-share listed companies affects corporate tax avoidance behavior, especially whether female executives tend to adopt more conservative tax strategies in the decision-making process. This study uses A-share listed companies from 2012 to 2022 as a sample to examine how female directors affect corporate tax strategies. The main hypothesis is that companies with a higher proportion of female directors adopt more conservative tax strategies. In addition, the study examines the moderating role of audit quality, assuming that higher audit quality will amplify the effect of female directors on reducing tax avoidance. The study uses regression analysis to test these hypotheses and evaluate the impact of leadership gender diversity and audit quality on tax behavior. The results show that companies with a higher proportion of female directors tend to avoid taxes less, indicating that they are more cautious in tax planning. In addition, audit quality is shown to strengthen this relationship, indicating that strong external supervision enhances the conservative tax strategy of female directors. The theoretical contribution of this study lies in expanding the gender dynamics in corporate governance, and its practical significance emphasizes the importance of gender diversity and high-quality audits in promoting responsible corporate behavior and improving tax compliance. These insights provide valuable guidance for policymakers and corporate managers.

Keywords: female executives; corporate tax avoidance; gender differences; audit quality; corporate governance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aiy:jnljtr:v:11:y:2025:i:2:p:451-468

DOI: 10.15826/jtr.2025.11.2.211

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