Overconfidence and Corporate Tax Policy

Chyz, James A.; Gaertner, Fabio B.; Kausar, Asad; Watson, Luke

doi:10.1007/s11142-019-09494-z

Cited by 76 publications

(56 citation statements)

References 41 publications

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“…This study contributes to the field of business ethics by showing that low earnings quality is associated with a discretionary decline in accruals through very narcissistic CEOs, as demonstrated by (Chyz et al, 2019;Lin et al, 2019;Plöckinger et al, 2016). Also, this study reinforces the reasons for using upper echelon theory as the leading theory in explaining the personality of executive narcissism (CEO) and its contextual relationship to various accounting reports ( .…”

Section: Introductionsupporting

confidence: 65%

Accounting Executives Narcissism: A Review and Research Agenda Using Content Analysis

Utama

Soewarno

Agustia

2020

HSSR

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Purpose of the study: This study aims to provide a conceptual framework and construction of executive narcissism (CEO) through content analysis of 52 reputable international journals of Scopus indexed (Q1). The aims also to explore valuable content and themes related to narcissistic accounting and reveal further research opportunities for important themes generated. Methodology: The articles were analyzed using the search method and remote text in the Airlangga library database. The study was conducted for a month among articles in Scopus Journal indexed in Q1 with "Accounting" and "Narcissism" as the keyword restriction. The study was conducted with a Word Frequency analysis using NVivo 12 plus to determine the coding and the central theme. Main Findings: A comparison coding was performed to prove the upper echelon theory as the leading theory used in the 52 articles analyzed. Information relating to the year the article was published, article title, author's name, and journal publication successfully collected. From 52 articles analyzed in the framework of narcissistic accounting, 24 codes were successfully revealed and subsequently categorized into several themes (keywords) for further research. Applications of this study: A literature review of 52 articles is closely related to ethical concepts and CEO decisions in choosing accounting choices (policies). Novelty/Originality of this study: New themes successfully revealed through content analysis.

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Section: Introductionsupporting

confidence: 65%

Accounting Executives Narcissism: A Review and Research Agenda Using Content Analysis

Utama

Soewarno

Agustia

2020

HSSR

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“…The study revealed that narcissistic CEOs tend to encourage the adoption of more aggressive practices, increasing the likelihood of involvement in tax sheltering. Chyz et al (2017) pointed out that narcissistic CEOs are more prone to engage in questionable practices and to make aggressive strategic decisions than are overconfident CEOs; after all, overconfidence is not as extreme a personality trait as NARC. On the other hand, matching the observations of Olsen and Stekelberg (2016) for narcissistic CEOs, Chyz et al (2017) concluded that overconfident CEOs are more likely to overestimate the net benefits from corporate investments in tax planning and thus favor the adoption of strategies that avoid or defer tax payment (Chyz et al, 2017).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…While our sample consisted exclusively of Brazilian firms, the studies above covered between 22 and 35 countries with different legal systems and tax rates. As shown by the literature, institutional factors may favor or limit the adoption by CEOs of aggressive tax policies (Chyz et al, 2017;Olsen & Stekelberg, 2016) and may have profound impacts on a country's economic development (Tsakumi et al, 2007).…”

Section: Descriptive Statistics and Pearson Correlationsmentioning

confidence: 99%

“…Research in the area of taxation has improved our understanding of how directors' behavioral predispositions, preferences, inclinations, and other observable traits affect corporate TA practices. In fact, corporate tax practices may be influenced by CEO personality traits other than NARC, including overconfidence and factors affecting the CEO's risk profile, such as skills, political ideology, and military background (Christensen et al, 2015;Chyz et al, 2017;Koester et al, 2016;Law & Mills, 2017;Olsen & Stekelberg, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Earlier studies investigating the association between CEO personality profile (e.g., NARC and overconfidence) and TA were conducted in developed economies and common law countries, especially in the United States of America (Armstrong et al, 2010;Claessens & Yurtoglu, 2013;Chyz et al, 2017;Olsen & Stekelberg, 2016;Tsakumis et al, 2007). In this study, we evaluated the association between CEO NARC and TA in Brazilian public firms.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

CEO narcissism and corporate tax avoidance,

Araújo

Góis²,

Luca

et al. 2021

Rev. contab. finanç.

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Narcissism (NARC) in senior executives has a perceptible impact on corporate decision-making and strategies and is often associated with unethical and opportunistic behaviors, including tax avoidance (TA). In this study, we therefore evaluated the association between chief executive officer (CEO) NARC and TA in Brazilian public firms. By focusing on Brazil, an emerging economy regulated by code law, our investigation makes an important contribution to the accounting literature on TA. Most studies examining the relation between corporate TA and CEO personality profile have been conducted in common law countries. According to the literature, TA behaviors are influenced by tax system specifics. In addition, the home country’s level of economic development should be taken into account when quantifying corporate TA. These observations, and the lack of previous investigation focusing on Brazil, ratify the relevance of the study. Our study also provides tax authorities, auditors, and investors with tools to identify narcissistic behaviors predictive of corporate TA, which may demand precautionary measures on part of business partners. The sample consisted of 68 Brazilian public firms (382 observations), covering the period 2010-2017, and a robust regression model with panel data was used. TA and NARC were measured with secondary data according to the literature. Our findings show a positive correlation between CEO NARC and TA. Executives with this personality trait come across as bold or aggressive, thus more prone to adopt TA strategies, as confirmed in the present study. The study contributes to the literature by demonstrating how a personality disorder like NARC affects corporate tax policies, with potential damage to corporate reputation.

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Local gambling culture and corporate tax aggressiveness: A trait activation perspective on informal institutions

Zeng

Zhou

et al. 2023

Manage Decis Econ

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Based on the theory of new institutionalism and trait activation, we empirically evaluated the role of gambling culture on aggressive corporate taxation. A positive association was found between gambling culture and tax aggressiveness, the gambling culture increased the risk preferences of firm executives. The relationship was more pronounced in non‐state‐owned firms, firms with a high proportion of male executives, shortsighted executives, local CEOs, and those located in areas with less intense tax regulation and lower levels of Islamic faith. The findings enrich studies investigating the economic consequences of gambling culture and provide innovative ideas for external regulators to formulate anti‐avoidance measures.

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Overconfidence and Corporate Tax Policy

Cited by 76 publications

References 41 publications

Accounting Executives Narcissism: A Review and Research Agenda Using Content Analysis

Accounting Executives Narcissism: A Review and Research Agenda Using Content Analysis

CEO narcissism and corporate tax avoidance,

Local gambling culture and corporate tax aggressiveness: A trait activation perspective on informal institutions

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