Do Family Owners Reduce Tax Avoidance? Examining the Contrasting Influence of CEO Financial Expertise on Tax Strategies

Authors

  • Muhammad Azeem Lahore Business School, The University of Lahore
  • Ali Amin The Lahore Business School, The University of Lahore

Keywords:

Tax Aggressiveness, Financial Expertise Moderation, Family Firm Governance, Ownership Structure

Abstract

We investigated the linkage between family ownership and tax avoidance. Moreover, we explore the moderating role of the CEO's financial expertise. Using a sample of 3,730 firm-year observations from 2008 to 2020, we tested our hypothesis through regression analysis and employed GMM for robustness checks. Drawing on agency theory and social identity theory, the study finds that family ownership is associated with lower levels of tax avoidance. However, CEOs with financial expertise tend to exhibit higher levels of tax aggressiveness, moderating this relationship in the opposite direction. Our results suggest that, consistent with social identity theory, family owners demonstrate strong affiliation, commitment, and concern for their firm's reputation.

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Published

2024-12-31

How to Cite

Azeem, M., & Amin, A. (2024). Do Family Owners Reduce Tax Avoidance? Examining the Contrasting Influence of CEO Financial Expertise on Tax Strategies. Asian Finance Research Journal (AFRJ), 6(2). Retrieved from https://journals.uol.edu.pk/afrj/article/view/3800

Issue

Volume 06 Issue 02

Section

Articles