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CEO age and tax planning

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  • Hui Liang James

Abstract

This study investigates the association between CEO age and corporate tax planning. Using a sample of 11,537 firm‐year observations from the fiscal year 1997–2013, I find CEO age exerts an economically significant influence on firms’ tax policies, incremental to economic determinants identified in prior research. Specifically, CEO age is positively related to cash and GAAP effective tax rates, and negatively related to permanent book‐tax difference, suggesting that older CEOs are less likely to take actions to lower tax burden. The results hold across different model specifications and robustness tests to address potential bias arising from endogeneity, sample selection issue, and the confounding effect of CEO tenure.

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  • Hui Liang James, 2020. "CEO age and tax planning," Review of Financial Economics, John Wiley & Sons, vol. 38(2), pages 275-299, April.
    • Handle: RePEc:wly:revfec:v:38:y:2020:i:2:p:275-299
    DOI: 10.1002/rfe.1072
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