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Family Ownership, Corporate Governance Quality and Tax Avoidance: Evidence from an Emerging Market—The Case of Jordan

Author

Listed:
  • Mohammad I. Almaharmeh

    (Accounting Department, Business School, The University of Jordan/Aqaba Campus, Aqaba 77110, Jordan)

  • Ali Shehadeh

    (Finance Department, Business School, The University of Jordan/Aqaba Campus, Aqaba 77110, Jordan)

  • Hani Alkayed

    (Accounting Department, University of Petra, Amman 1196, Jordan)

  • Mohammad Aladwan

    (Accounting Department, Business School, The University of Jordan/Aqaba Campus, Aqaba 77110, Jordan)

  • Majd Iskandrani

    (Business School, The University of Jordan, Amman 11942, Jordan)

Abstract

This study examines the impact of family ownership on tax avoidance decisions. This study further investigates the effects of corporate governance quality on the relationship between family ownership and tax avoidance. We construct a sample of non-financial firms listed on the ASE for the period 2015–2021. The results demonstrate that family-owned firms have high levels of tax avoidance. This result supports the private-benefit expropriation hypothesis. Regarding the mediating effect of corporate governance variables, the results suggest that large audit committees and audit committees that meet more frequently curb attempts by family owners to avoid paying tax.

Suggested Citation

  • Mohammad I. Almaharmeh & Ali Shehadeh & Hani Alkayed & Mohammad Aladwan & Majd Iskandrani, 2024. "Family Ownership, Corporate Governance Quality and Tax Avoidance: Evidence from an Emerging Market—The Case of Jordan," JRFM, MDPI, vol. 17(2), pages 1-18, February.
    • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:2:p:86-:d:1341000
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    References listed on IDEAS

    as
    1. Hanlon, Michelle & Heitzman, Shane, 2010. "A review of tax research," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 127-178, December.
    2. Kim, Jeong-Bon & Li, Yinghua & Zhang, Liandong, 2011. "Corporate tax avoidance and stock price crash risk: Firm-level analysis," Journal of Financial Economics, Elsevier, vol. 100(3), pages 639-662, June.
    3. Amneh Alkurdi & Ghassan H. Mardini, 2020. "The impact of ownership structure and the board of directors’ composition on tax avoidance strategies: empirical evidence from Jordan," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 18(4), pages 795-812, November.
    4. Harvey James, 1999. "Owner as Manager, Extended Horizons and the Family Firm," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 41-55.
    5. Yunyun Jiang & Haitao Zheng & Ran Wang, 2021. "The effect of institutional ownership on listed companies’ tax avoidance strategies," Applied Economics, Taylor & Francis Journals, vol. 53(8), pages 880-896, February.
    Full references (including those not matched with items on IDEAS)

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