The Relationship between Corporate Governance and Tax Avoidance Evidence from Germany Using a Regression Discontinuity Design

Kiesewetter, Dirk; Manthey, Johannes

doi:10.2139/ssrn.2951699

Cited by 6 publications

(11 citation statements)

References 52 publications

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“…So, if the firm is audited by a BIG4, it is less likely to adopt aggressive tax strategies. This finding is similar with those of Kiesewetter and Manthey (2017), Pilos (2017) and Gaaya et al (2017) and then we support our second hypothesis. Indeed, audit quality is considered one of the most effective governance mechanisms because it protects users against the opportunistic and fraudulent actions of managers.…”

Section: Resultssupporting

confidence: 92%

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2019

IJEFI

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The purpose of this paper is to examine the effect of CEO compensation on corporate tax avoidance. It is also investigated the moderating effect of corporate governance, especially the audit quality on this association. We use a sample of 67 firms listed on the Tunisian stock exchange from 2013 to 2016. Based on GLS regression models, we find that there is a positive and significant relationship between CEO compensation and corporate tax avoidance. This result advances that managers are willing to engage in risky activities that provide them additional compensation by extracting rents from tax-saving positions. However, we find a negative association between variable CEO compensation and tax avoidance in well-audited firms, supporting the moderating effect of audit quality on the relation between CEO compensation and tax avoidance. These findings suggest that audit quality is efficient corporate governance, while protecting users against the opportunistic and fraudulent actions of managers.

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Section: Resultssupporting

confidence: 92%

“…In this context, Armstrong et al (2015) confirmed thatmanager can abuse and engage in tax avoidance activities in low-governed firm. Likewise, Kiesewetter and Manthey (2017) and Pilos (2017) found that good governance structure reduces level of tax ovoidance.…”

Section: Moderating Effect Of Audit Qualitymentioning

confidence: 98%

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2019

IJEFI

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“…Indeed, the variables size of the board of directors, the independence of its members and gender diversity have a positive and statistically insignificant impact on the probability of the presence of tax risk in Tunisian listed companies. On the other hand, the direction duality variable registers a positive and statistically significant correlation with the variable to be explained (Kiesewetter and Manthey, 2017).…”

Section: Conclusion and Managerial Implicationsmentioning

confidence: 92%

The Impact of Internal Governance Mechanisms on Tax Risk in Developing Countries: An Empirical Analysis

Mkadmi

Say

Saida

2022

IJEFI

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The purpose of this study investigates the impact of governance mechanisms, linked to the board of directors, on the tax risk of Tunisian listed companies. In order to empirically verify this relationship in the Tunisian context, we conducted a logistic regression with 8 banks listed on the Tunisian Stock Exchange during the period of 2008-2018. The overall results show that all the independent variables have a positive and non-significant impact on the probability of the presence of tax risk (with the exception of the dual management variable). Indeed, the variables size of the board of directors, the independence of its members and gender diversity have a positive and statistically insignificant impact on the probability of the presence of tax risk in Tunisian listed companies. On the other hand, the direction duality variable registers a positive and statistically significant correlation with the variable to be explained.

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“…Further, in order to adequately examine the executive compensationtax aggressiveness relationship, several variables were considered to control for individual company characteristics following an extant literature review (e.g. Campbell et al, 2017;Halioui et al, 2016;Kiesewetter and Manthey, 2018;Richardson et al, 2013). These included size, profitability, leverage, capital intensity, growth, foreign activity, R&D intensity, operating volatility and industry as well as year indicators (CONTROLS).…”

Section: Corporate Tax Aggressiveness In Indiamentioning

confidence: 99%

Impact of executive compensation on corporate tax aggressiveness: evidence from India

Gill

Arora

2022

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PurposeThere is growing empirical evidence in context of the developed countries that greater tax aggressiveness of companies is associated with higher incentives to their executives. However, the same cannot be extended to emerging economies like India due to their distinct compensation practices. The present study, therefore, aims to bridge this gap by exploring the relationship between executive compensation and corporate tax aggressiveness in context of the Indian economy.Design/methodology/approachThe sample comprises a subset of the S&P BSE 500 Index companies for FY 2014–15 through 2018–19. A fixed effects panel model has been used to discern the impact of executive compensation on corporate tax aggressiveness with and without the moderating effect of a proxy for corporate governance strength.FindingsThe econometric analysis evinces a significant negative impact of the fixed executive compensation on tax aggressiveness, specifically with the moderation of corporate governance strength which was found to have a positive effect on the said relation. In addition, no significant relationship was observed between variable compensation and tax aggressiveness. These results were robust to an alternate specification of the corporate governance strength proxy as well as the system generalised method of moments estimation employed to deal with endogeneity.Originality/valueThe study provides insights on a poor interest alignment between shareholders and managers in India owing to an insignificant amount of variable pay in the total executive compensation.

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The Relationship between Corporate Governance and Tax Avoidance Evidence from Germany Using a Regression Discontinuity Design

Abstract: The relationship between corporate governance and tax avoidance-evidence from Germany using a regression discontinuity design arqus Discussion Paper, No. 218

Cited by 6 publications

References 52 publications

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Untitled

The Impact of Internal Governance Mechanisms on Tax Risk in Developing Countries: An Empirical Analysis

Impact of executive compensation on corporate tax aggressiveness: evidence from India

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