CEO power and corporate tax avoidance in emerging economies: does ownership structure matter?

IF 3.2 Q1 BUSINESS, FINANCE Journal of Accounting in Emerging Economies Pub Date : 2024-05-28 DOI:10.1108/jaee-06-2023-0181
Anissa Dakhli
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Abstract

Purpose

The purpose of this paper is to study how CEO power impact corporate tax avoidance. In particular, this paper aims to empirically examine the moderating impact of institutional ownership on the relationship between CEO power and corporate tax avoidance.

Design/methodology/approach

The multivariate regression model is used for hypothesis testing using a sample of 308 firm-year observations of Tunisian listed companies during the 2013-2019 period.

Findings

The results show that CEO power is negatively associated with corporate tax avoidance and that institutional ownership significantly accentuates the CEO power’s effect on corporate tax avoidance. This implies that CEOs, when monitored by institutional investors, behave less opportunistically resulting in less tax avoidance.

Practical implications

Our findings have significant implications for managers, legislators, tax authorities and shareholders. They showed that CEO duality, tenure and ownership can mitigate the corporate tax avoidance in Tunisian companies. These findings can, hence, guide the development of future regulations and policies. Moreover, our results provide evidence that owning of shares by institutional investors is beneficial for reducing corporate tax avoidance. Thus, policymakers and regulatory bodies should consider adding regulations to the structure of corporate ownership to promote institutional ownership and consequently control corporate tax avoidance in Tunisian companies.

Originality/value

This study differs from prior studies in several ways. First, it addressed the emerging market, namely the Tunisian one. Knowing the notable differences in institutional setting and corporate governance structure between developed and emerging markets, this study will shed additional light in this area. Second, it proposes the establishment of a moderated relationship between CEO power and corporate tax avoidance around institutional ownership. Unlike prior studies that only examined the simple relationship between CEO power and corporate tax avoidance, this study went further to investigate how institutional ownership potentially moderates this relationship.

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新兴经济体的首席执行官权力与公司避税:所有权结构是否重要?
本文旨在研究 CEO 权力如何影响公司避税。特别是,本文旨在实证研究机构所有权对 CEO 权力与企业避税之间关系的调节作用。研究结果结果表明,CEO 权力与企业避税负相关,机构所有权显著增强了 CEO 权力对企业避税的影响。这意味着首席执行官在机构投资者的监督下,会减少机会主义行为,从而减少避税。研究结果表明,首席执行官的双重性、任期和所有权可以减少突尼斯公司的避税行为。因此,这些发现可以指导未来法规和政策的制定。此外,我们的研究结果还证明,机构投资者持有股份有利于减少企业避税。因此,政策制定者和监管机构应考虑在公司所有权结构中增加相关规定,以促进机构所有权,从而控制突尼斯公司的避税行为。首先,它针对的是新兴市场,即突尼斯市场。鉴于发达市场和新兴市场在制度设置和公司治理结构方面存在显著差异,本研究将在这一领域提供更多启示。其次,它提出围绕机构所有权建立 CEO 权力与公司避税之间的调节关系。与以往仅研究首席执行官权力与企业避税之间的简单关系不同,本研究进一步探讨了机构所有权如何潜在地调节这种关系。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.80
自引率
13.00%
发文量
38
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