Tax Avoidance in Family Business: The Ethical Perspective of CEO Transgenerational Responsibility

Alessandro Cirillo (), Maria Angela Manzi (), Jonathan Bauweraerts () and Salvatore Sciascia ()
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Alessandro Cirillo: University of Naples “Federico II”
Maria Angela Manzi: University of Naples “Federico II”
Jonathan Bauweraerts: University of Mons
Salvatore Sciascia: Jönköping International

Journal of Business Ethics, 2025, vol. 198, issue 4, No 7, 864 pages

Abstract: Abstract Exploring the intricacies of heterogeneity in tax avoidance practices within family firms, a growing trend acknowledges the significant role of chief executive officers (CEOs) in setting the ethical tone and shaping corporate tax strategies. However, these studies often overlook the influence of the CEO’s transgenerational orientation, which becomes crucial when assessing ethics in family businesses. Therefore, the paper aims to analyse to what extent the CEO’s transgenerational responsibility (the moral obligation that incumbent leaders have vis-à-vis next generation family members) affects tax avoidance with a utilitarianism lens. Relying on a sample of 272 firm-year observations of Italian listed family companies along the period 2014–2018, the panel regression model finds a positive relationship. Moreover, the involvement in the business of the next generation of family members strengthens this relationship, suggesting that the immediate proximity with other relatives fosters the conversion of the CEO’s transgenerational responsibility into tax avoidance practices. Finally, when the family firm is in financial distress, CEOs with greater transgenerational responsibility tend to avoid more taxes.

Keywords: Tax avoidance; Utilitarianism; Transgenerational responsibility; Next generation; Financial distress; Family business (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10551-025-05941-x

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