Do UK outside CEOs engage more in tax planning than the insiders?

Nor Shaipah Abdul Wahab, and Holland, Kevin and Soobaroyen, Teerooven (2015) Do UK outside CEOs engage more in tax planning than the insiders? Jurnal Pengurusan, 45 . pp. 1-19. ISSN 0127-2713


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Firms engage in tax planning to varying extents. One potential determinant of such variations may be the characteristics of senior executives. The objective of this study is to investigate whether CEO origin (insiders or outsiders) and departing CEO tenure are significant in explaining the extent of corporate tax planning. The sample is non-financial London Stock Exchange listed firms from 2005 to 2011. Upon regressing tax planning on CEO origin, departing CEO tenure and other control variables, we find robust evidence that outsiders are associated with higher levels of tax planning than the insiders. Our results also reveal a negative moderating influence of departing CEO tenure on tax planning levels of current CEOs. Collectively, this paper provides the first UK evidence on the influence of CEO origin and departing CEO tenure on tax planning. This paper has important implications for tax authorities since it highlights CEO characteristics can be relevant indicators in a tax avoidance-risk assessment exercise. The findings will also be of interest to management and its board when considering factors of interest in a turnover scenario.

Item Type:Article
Keywords:Tax planning; CEO origin; departing CEO tenure; upper echelons theory
Journal:Jurnal Pengurusan
ID Code:9613
Deposited By: ms aida -
Deposited On:17 Mar 2016 01:09
Last Modified:14 Dec 2016 06:50

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