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Tax avoidance in management-owned firms: evidence from Brazil

Otávio Gomes Cabello (Universidade Estadual de Campinas, Campinas, Brazil)
Luiz Eduardo Gaio (Universidade Estadual de Campinas, Campinas, Brazil)
Christoph Watrin (School of Business and Economics, Institute of Accounting and Taxation, University of Münster, Münster, Germany)

International Journal of Managerial Finance

ISSN: 1743-9132

Article publication date: 12 April 2019

Issue publication date: 31 July 2019




The purpose of this paper is to test if companies with a greater concentration of management ownership (and thus more risk-averse managers) avoid less tax.


The authors use a regression analysis with panel data, using as a sample of Brazilian companies from 2001 to 2015. The authors investigate the impact of insider ownership on tax avoidance, testing how and how much different ownership levels of inside owner are associated with tax avoidance measured by effective tax rates and book-tax differences.


The results indicate that different levels of management ownership are associated with different levels of tax avoidance behavior.


This paper contributes to the literature showing that ownership and decision making are not always focused on only a few decision makers. The owners are likely to be more risk averse and therefore less willing to invest in risky projects such as tax avoidance.



Cabello, O.G., Gaio, L.E. and Watrin, C. (2019), "Tax avoidance in management-owned firms: evidence from Brazil", International Journal of Managerial Finance, Vol. 15 No. 4, pp. 580-592.



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