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Tax avoidance, managerial ownership, and agency conflicts

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  • Wongsinhirun, Nopparat
  • Chatjuthamard, Pattanaporn
  • Chintrakarn, Pandej
  • Jiraporn, Pornsit

Abstract

We examine how corporate tax avoidance is influenced by managerial ownership. Our results, based on a large sample of nearly 30,000 observations across a quarter of a century, demonstrate that firms where managers hold more shares exhibit less tax avoidance. Our findings corroborate the notion that corporate tax avoidance is primarily motivated by agency conflicts and is significantly mitigated by higher managerial ownership, which brings managers and shareholders’ interests into better alignment. Further analysis corroborates the results, i.e., propensity score matching, an instrumental variable analysis, and using alternative measures of tax avoidance.

Suggested Citation

  • Wongsinhirun, Nopparat & Chatjuthamard, Pattanaporn & Chintrakarn, Pandej & Jiraporn, Pornsit, 2024. "Tax avoidance, managerial ownership, and agency conflicts," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612323013090
    DOI: 10.1016/j.frl.2023.104937
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    References listed on IDEAS

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    Cited by:

    1. Kałdoński, Michał & Jewartowski, Tomasz, 2024. "Tax aggressiveness under concentrated ownership: The importance of long-term institutional investors," Finance Research Letters, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Tax avoidance; Managerial ownership; Agency conflicts; Agency theory; Tax aggressiveness;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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