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Tax aggressiveness in family firms and the non-linear entrenchment effect

Elisabetta Mafrolla and D’Amico, Eugenio

Journal of Family Business Strategy, 2016, vol. 7, issue 3, 178-184

Abstract: This article examines whether family firms are more tax aggressive than nonfamily firms when family involvement is greater. By testing our predictions on a panel of listed Italian firms, we find that the family status has a moderating non-linear effect on corporate tax aggressiveness, as too much family involvement (which is otherwise beneficial) causes the detrimental outcome of higher tax aggressiveness. As a novelty to the literature, we show that family involvement has a non-linear impact on tax aggressiveness in family firms, as concerns about a family versus minority conflict arise when the family is too entrenched.

Keywords: Family involvement; Entrenchment; Socio-emotional wealth; Family control and influence; Tax aggressiveness; Curvilinear relationship (search for similar items in EconPapers)
Date: 2016
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