Are Family Firms More Tax Aggressive Than Non-Family Firms?

Chen, Shuping; Chen, Xia; Cheng, Qiang; Shevlin, Terry

doi:10.2139/ssrn.1014280

Cited by 418 publications

(860 citation statements)

References 19 publications

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“…Finally, following Chen et al . (), we control the lagged value of firm characteristics variables and still find that our results are robust. We also control the lagged BTD in this section to check the robustness of our results.…”

Section: Additional Analysismentioning

confidence: 57%

“…Consistent with this notion, Chen et al . () shows a positive and significant correlation between ROA and the book–tax difference. Lev is controlled.…”

Section: Model Specification and Empirical Resultsmentioning

confidence: 90%

“…The results suggest that CEOs’ hometown ties with the local municipal Party committee secretaries could significantly help firms to avoid taxes. The sign and significance of our control variable coefficients are generally consistent with prior literature (Chen et al ., ; Hanlon and Heitzman, ; Kim and Zhang, ). We control for a firm's tax‐related characteristics such as firm size ( Size ), leverage ( Lev ), profitability ( ROA ), intangible assets ( Intan ), and liquidity ( Cash ).…”

Section: Model Specification and Empirical Resultsmentioning

confidence: 99%

See 2 more Smart Citations

CEO hometown ties and tax avoidance‐evidence from China's listed firms

Shen

Gao

et al. 2019

Accounting & Finance

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This study investigates the effects of CEO hometown ties on corporate tax avoidance. The results show that CEO hometown ties to local government officials have a significantly positive impact on tax avoidance for private firms in China. We also find that the hometown ties effect is more pronounced in cities with weak public governance and in cities whose municipal Party committee secretaries are promoted from the same city, whereas the effect is weak in cities whose municipal Party committee secretaries are transferred from other places. In summary, our results suggest that hometown ties as an important political resource can facilitate connected private firms to obtain more economic resources from government.

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Section: Additional Analysismentioning

confidence: 57%

“…Consistent with this notion, Chen et al . () shows a positive and significant correlation between ROA and the book–tax difference. Lev is controlled.…”

Section: Model Specification and Empirical Resultsmentioning

confidence: 90%

Section: Model Specification and Empirical Resultsmentioning

confidence: 99%

See 1 more Smart Citation

CEO hometown ties and tax avoidance‐evidence from China's listed firms

Shen

Gao

et al. 2019

Accounting & Finance

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show abstract

“…() address how the presence of tax specialists among BOD members affects companies’ effective tax rate (ETR). The level of a director's independence affects how aggressively a company manages its tax policy (Chen et al ., ; Lanis and Richardson, ; Sarkar et al ., ; Minnick and Noga, ).…”

Section: Literature Reviewmentioning

confidence: 99%

Pyramid Establishment Resulting from Succession Motivation

Yang

2016

Asia-Pac J of Fin Stud

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I examine if a valuation method for unlisted firms adopted by the Korean inheritance tax code allows economic agents to counterplot and leads to the establishment of pyramids. The Korean inheritance tax code, adopting a weighted average of the net asset value of the most recent year (40%) and 3-year average net income (60%) as firm value for inheritance taxation, implicitly leads controlling shareholders to vertically split or insert an intermediary to control subsidiaries, both of which yield pyramidal governance structure within family business groups. Inheriting unlisted firms via intermediaries reduces inheritance tax and its tax saving effect is maximized when intermediary firms are much smaller than subsidiaries.

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“…Thus, a LOSS dummy variable is included. Growth firms are more likely to purchase tax‐favored assets (Chen et al ), so sales growth is included to control for growth. A firm's investment decisions might have an effect on tax planning, and therefore, investment is used as a control variable.…”

Section: Reaearch Designmentioning

confidence: 99%

Tax Avoidance, Near‐Future Earnings, and Resource Availability

Lee

2018

Int Rev Finance

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This study examines the impact of near-future earnings and resource availability on current-year tax avoidance behavior from the perspective of both tax and non-tax costs. Two conclusions are reached. First, when firms expect high-earnings performance in the near future, they aggressively engage in current-year tax planning to manage potential future tax and nontax costs. Second, firms that expect high-resource availability in the near future put tax audit risks and resultant non-tax costs on the front burner. Therefore, they are unlikely to undertake aggressive tax avoidance behavior.

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Are Family Firms More Tax Aggressive Than Non-Family Firms?

Cited by 418 publications

References 19 publications

CEO hometown ties and tax avoidance‐evidence from China's listed firms

CEO hometown ties and tax avoidance‐evidence from China's listed firms

Pyramid Establishment Resulting from Succession Motivation

Tax Avoidance, Near‐Future Earnings, and Resource Availability

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