Females on the board of directors and corporate tax aggressiveness in Indonesia: an empirical analysis

Herawati, Nurul; Rahmawati, Rahmawati; Indudewi, Dian; Wardani, Marita Kusuma; Susanto, Barkah

doi:10.1504/ijgfi.2021.116831

Cited by 3 publications

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“…In addition to the above studies, there are also some studies that investigate the influence of gender diversity on tax avoidance using the Indonesia setting. For example, Herawati et al (2021) find that the presence of females as executives is related to lower tax aggressiveness. Similarly, Anggraeni & Kurnianto (2020) find that female director is associated with lower tax avoidance levels.…”

Section: Jrakmentioning

confidence: 99%

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Females and Tax Avoidance: Evidence from the Agency Problem Perspective

Zudana

Tarigan²,

Hutabarat³

et al. 2021

JRAK

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Gender diversity has long been an issue being studied in previous studies. Mostly, they exploit the different characteristics of females and males and how they affect corporate behaviour. However, prior studies largely examine the presence of female in either agent or principal. We fill the research gap by examining the presence of females in both agent and principal on tax avoidance. We examine the relationship between females and tax avoidance using a quantitative research method. Using 538 firm-year observations of Indonesian listed firms during the period 2015 – 2019, we find that female presence is related to a higher degree of tax avoidance. Moreover, we find that the relationship is driven by the presence of females as auditors signing partners. Our result does not reflect the negative side of having females in organizations because we use a broad measure of tax avoidance. Our result may provide insight for shareholders or other related parties to consider an additional factor, namely the presence of females in both agent and principal, to assess companies' tax avoidance behavior.

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Section: Jrakmentioning

confidence: 99%

“…Francis et al (2014), Hoseini et al (2018,Anggraeni & Kurnianto (2020),Herawati et al (2021),Jarboui et al (2020), and Duong & Pallasch …”

mentioning

confidence: 95%

Females and Tax Avoidance: Evidence from the Agency Problem Perspective

Zudana

Tarigan²,

Hutabarat³

et al. 2021

JRAK

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Antecedents of tax aggressiveness of listed non-financial firms: Evidence from an emerging economy

2023

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Do women on corporate boardrooms have an impact on tax avoidance? The mediating role of corporate social responsibility

Dakhli

2021

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Purpose The purpose of this paper is to investigate the direct and indirect relationship between board gender diversity and corporate tax avoidance using corporate social responsibility (CSR) as a mediating variable. Design/methodology/approach This study uses a panel dataset of 200 French firms listed during 2007–2018 period. The direct and indirect effects between board gender diversity (BGD) and tax avoidance were tested by using structural equation model analysis. Findings The results indicate that the presence of women on corporate boardrooms negatively affects tax avoidance. The greater the proportion of women in boards, the lower the likelihood of tax avoidance practice. In the mediation test, CSR appears to partially mediate the link between women on boards and corporate tax avoidance. Additional analysis shows that the social dimension of CSR produces this mediating effect. Practical implications The results have practical implications for companies in regulating the composition of their boards. To benefit from diversity, firms have to increase women‘s percentage in their boards of directors. Also, investors are encouraged to pay attention to the percentage of female directors when investing and purchasing shares. Social implications This study proved empirically that the higher proportion of female directors significantly reduces the possibility of tax avoidance either directly or indirectly through enhancing CSR performance. The findings show that firms with gender diversified boards are more likely to get involved in CSR for hedging against the potential consequences of aggressive tax avoidance practices. In light of the above results, firms are well-advised to strongly apply the policy encouraging or mandating women as board members to take advantage of their expected benefits. Originality/value The originality of this paper consists in proposing the establishment of both direct and indirect relationships between BGD and corporate tax avoidance through CSR. Unlike prior studies that have been examining the direct relationship between corporate governance mechanisms and corporate tax avoidance, this study went further to investigate the indirect relationship between these two constructs. This study also differs from prior studies as it examines the effect of BGD on each of constituting pillars of CSR, namely, environmental, social and governance. To date, an extensive part of CSR research has used the combined score of CSR, but the effects on different CSR pillars remain little investigated.

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Females on the board of directors and corporate tax aggressiveness in Indonesia: an empirical analysis

Cited by 3 publications

References 0 publications

Females and Tax Avoidance: Evidence from the Agency Problem Perspective

Females and Tax Avoidance: Evidence from the Agency Problem Perspective

Antecedents of tax aggressiveness of listed non-financial firms: Evidence from an emerging economy

Do women on corporate boardrooms have an impact on tax avoidance? The mediating role of corporate social responsibility

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