Influence of Chief Executive Officers’ Managerial Attributes on Tax Avoidance of Selected Production Firms in Nigeria
DOI:
https://doi.org/10.22105/xb1jhb09Keywords:
CEO, Tax Avoidance, Upper Echelons Theory, Data Normality Test, RegressionAbstract
The broad objective of this study is to explain the effect of Chief Executive Officers' (CEO) attributes on tax avoidance of listed firms in Nigeria. To this end, this study specifically examined the impact of CEOs' tenure, CEOs' share ownership, CEOs' gender, and CEOs' nationality on tax avoidance over a 10-year time frame (2012 – 2021) for listed non-finance firms in Nigeria. Notably, this study employed the upper echelon theory as the key theoretical framework, noting that the key tenet of the upper echelon theory is that a business organization reflects its top management team, comprised of the CEO. In this study, an ex-post factor research design was employed, and fifteen non-finance firms were drawn from a population of one hundred and nine using a non-probability sampling technique procedure. The robust regression analysis technique was employed to test the formulated hypotheses after fulfilling the conditions for obtaining non-spurious regression estimates. Specifically, the result reveals mixed evidence suggesting that the effect of CEOs' attributes on tax avoidance typically depends on the observed or unobserved traits of the CEO. Clearly, the result indicates that higher ownership rights in the hands of the CEO significantly reduce tax avoidance. Therefore, this study recommends, among others, that to optimize the non-debt tax saving strategy for listed non-finance firms in Nigeria, the management of each firm must develop a culture within the organization that values responsible tax planning practices and encourage CEOs to actively consider minimizing ownership right volume to serve as a strategic tool for gaining tax advantages.
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