In-laws’ involvement in management and tax avoidance: Evidence from family firms in China

Xin Shi, Jingru Hou and Qiankun Gu

Finance Research Letters, 2023, vol. 53, issue C

Abstract: This paper investigates the effect of the founder's in-laws involved in management on corporate tax avoidance in family firms. Using a sample of Chinese-listed family firms from 2008 to 2018, we find that in-laws’ involvement can significantly increase tax avoidance. We also show that both tax enforcement efforts and social trust mitigate the positive effect. Further analysis indicates that in-law CEOs are more tax aggressive than other types of CEOs. Overall, our paper provides empirical evidence for understanding how in-laws’ involvement shapes tax management activities from the perspective of agency conflict, extending the existing literature.

Keywords: In-law managers; Family firms; Tax enforcement efforts; Social trust; In-law CEOs (search for similar items in EconPapers)
JEL-codes: G32 H26 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:53:y:2023:i:c:s154461232300020x

DOI: 10.1016/j.frl.2023.103646

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