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This paper aims to examine whether tax disclosure in Global Reporting Initiative (GRI)-based sustainability reporting mitigates aggressive tax avoidance.

This study uses a multiple regression method for 714 nonspecially taxed firms listed on the Indonesia Stock Exchange in 2014–2018.

The findings demonstrate that disclosing tax payments in GRI-based sustainability reports reduces aggressive tax avoidance. Additional analysis indicates that the number of GRI-based sustainability reports positively affects aggressive tax avoidance. However, disclosing tax payments in multiple GRI-based sustainability reports negatively affects aggressive tax avoidance.

Recent prior studies demonstrate that aggressive tax avoidance does not indicate an organizational culture that devalues corporate social responsibility. This paper argues that firms cannot find the link between tax and corporate social responsibility when tax payments are not incorporated in sustainability reports. GRI considers tax a sustainability issue and seeks to institutionalize this concept by recommending that firms disclose taxes in their sustainability reports. This research analyses whether disclosing taxes in GRI-based sustainability reports may serve as a form of soft law by convincing firms that tax is a sustainability issue, thereby reducing their tax avoidance. This topic has received little attention in previous research.

The increased interest among academicians to explore more about tax management behavior is evident in the literature on corporate tax avoidance. This paper aims to illustrate the multiple aspects that influence the tax avoidance behavior of corporations and its impacts through the systematic review method.

This study used “Tax Avoidance” OR “Tax Aggressiveness” OR “Tax Planning” as search strings to extract the relevant literature from the Scopus database. This study is a comprehensive analysis of existing literature on corporate tax avoidance behavior. Further, the keyword network analysis has been used to find out the most explored and dry research areas related to corporate tax avoidance behavior using VOSviewer software.

The study finds that taxation decision is an important managerial decision. Managers adopt tax avoidance tactics to boost postax profits to meet the shareholders’ expectations, particularly of risk-averse shareholders, and sometimes for their benefit also. With this, this study also finds that firms’ characteristics, political connections and corporate social responsibility activities also impact taxation decisions. In addition, the study identifies that tax-avoiding behavior has a contradictory impact on firm value, market growth and corporate transparency disclosure decisions.

The study assists the researchers by providing a brief overview of tax avoidance behavior, for corporates in understanding the implications of tax avoidance, and for policymakers to fix the taxation loopholes and bring necessary tax reforms.

This study adds to the existing literature by providing a thorough overview of theories, determinants and outcomes of corporate tax avoidance behavior.

The purpose of this paper is to examine the impact of directors’ and officers’ liability insurance (D&O insurance hereafter) on corporate governance and firm performance, with a specific focus on investment efficiency.

Using a sample of Chinese A-share listed firms from the period 2007 to 2020, this study uses Ordinary Least Squares regressions to investigate the research questions, as well as moderating and mediating effects. Additionally, alternative measures of investment efficiency are used, and the Heckman two-stage model and propensity score matching model are used to demonstrate the consistency of the findings and to mitigate the risk of endogeneity.

The findings of this study suggest that purchasing D&O insurance has a detrimental impact on corporate investment efficiency, particularly in the context of over-investment activities; robust internal governance mechanisms, exemplified by a higher shareholding ratio of the top shareholder and enhanced internal control quality, alleviate this negative effect; and financing constraints act as a mediating factor in the association between D&O insurance and investment efficiency.

Corporate investment efficiency is of significant importance for both national macroeconomic growth and micro-enterprise development. Notably, the prevalence of D&O insurance among Chinese firms is progressively increasing, thus exerting a growing influence. This study contributes to the existing literature on D&O insurance and corporate investment efficiency, providing valuable insights into the economic impact of D&O insurance on Chinese firms. The empirical evidence presented herein facilitates future reforms and adjustments.

This study investigates the impact of bank CEOs’ inside debt on shareholder benefits in the context of bank mergers and acquisitions (M&A) before the 2008–2009 financial crisis.

Employing an event-study methodology, this analysis delves into market reactions to bank M&A announcements during 2006–2007, encompassing 105 M&As by 79 public commercial banks. This era witnessed heightened risk-taking behavior on the verge of the financial crisis. We explore the relation between relative inside debt and market abnormal returns at M&A announcements and the association between relative inside debt and cash payment preferences in M&As.

Evidence suggests that M&A announcements from banks where acquiring CEOs hold a substantial inside debt experience favorable stock market reaction, particularly for smaller banks. Additionally, banks with elevated CEO inside debt tend to favor cash as a payment mode for M&As.

One limitation of this study is the short period of data availability. The data used in this study covers only 2006 and 2007, the periods marked by notable risk-taking activities on the verge of the financial crisis. Although this period is perfectly suitable for our investigation, given the prevalence of conflicts between equity and debt holders, it is essential to acknowledge that our findings may not capture changes or trends over time. Nevertheless, the results offer valuable insights into the factors that influence the behavior of the studied population. Future research could employ a longitudinal design to address this limitation and gain a more comprehensive understanding of the dynamics over extended periods.

Our study has significant implications for businesses and policymakers as it provides insights into the factors contributing to financial crises and how compensation mechanisms can be used to moderate bank risk-taking. We propose that CEO inside debt compensation presents a plausible mechanism that boards of directors can incorporate into bank executive compensation contracts. By doing so, they can promote value-enhancing investments and moderate excessive risk-taking, thereby safeguarding the financial stability of individual banks and overall financial system.

Our study sheds light on the beneficial role of bank CEO inside debt for shareholders, contributing empirical backing to the conflict resolution viewpoint in the discourse on wealth appropriation. From a regulatory stance, our findings advocate for the inclusion of bank CEO inside debt in executive remuneration agreements. Such a strategy can empower boards of directors to mitigate undue risk and enhance shareholder value in M&As, safeguarding both individual bank and broader financial system stability.

This paper examines the relationship between tax avoidance and accounting comparability. The authors argue that aggressive tax behavior impairs the comparability of financial statements by altering the accounting function, which maps economic events into accounting data.

The empirical analysis is based on a large sample of United States (US) firms. The authors use raw and industry-adjusted effective tax rates (ETRs) to proxy tax avoidance. The authors use the measure of accounting comparability developed by De Franco et al. (2011), which aims to capture the similarity of the accounting function.

The authors find that firms with more aggressive tax avoidance strategies have substantially lower accounting comparability. The evidence also shows that the negative effect of tax avoidance on accounting comparability is driven by firms with aggressive tax planning strategies beyond the industry norm. Furthermore, using an alternative measure of accounting comparability as a function of pre-tax income, the authors continue to find evidence of the negative effect of tax avoidance behavior. Importantly, this provides evidence that the effect of aggressive tax planning is not limited to the reported tax expense, but affects the comparability of the overall financial reporting system.

The authors identify a new potential cost of tax aggressive activities, being the loss of accounting comparability as driven by tax aggressive activities. The results contribute to the literature on the costs of tax avoidance and on the determinants of accounting comparability.

This study examines the relation between pay inequalities in top management teams and how efficiently firms convey valuation-relevant information to investors. Given that reward comparisons with reference groups create feelings of inequity, top management team pay inequalities can impair the information environment. This manifests into lengthier or less readable financial reports.

This paper employs an ordinary least squares (OLS) regression model to test whether and how the pay distribution in the top management team is associated with the readability of the annual report. It also employs a two-stage least squares (2SLS) regression model to further address the endogeneity concern. Lastly, it conducts cross-sectional analyses to examine heterogeneity in the observed relation.

Using the intra-firm pay gap as a proxy for pay inequality and file size, Bog Index and Fog Index of the 10-K filings as a proxy for financial report readability, the author finds that firms with larger pay gaps exhibit lengthier or less readable 10-K filings. The main findings are robust to the use of an instrumental variable approach. She finds some evidence that the relation is less pronounced when pay gaps are justified by explicit legal authority of CEOs or high ability of CEOs. The main results are robust to considerations of alternative explanations.

This paper adds a new dimension to the debate on pay inequality by studying pay gaps in the top management team and financial report readability. The author's findings have important implications for executive compensation policies and for corporate disclosure policies.

This study aims to examine the effects of local tournament incentives on environmental, social and governance (ESG) disclosure and the quality of such disclosures among Chinese A-share listed companies. Furthermore, it seeks to investigate the moderating roles of CEO duality, institutional investors’ shareholding and product market competition in this relationship.

This study uses a quantitative approach, and data from A-share listed companies in China spanning from 2012 to 2021. To test the proposed hypotheses, the authors conduct hierarchical regression analysis along with a series of robustness tests to ensure the validity of our findings.

The findings of this study indicate that local tournament incentives have a positive impact on companies’ propensity to disclose ESG information, yet they negatively influence the quality of these disclosures. Additionally, the presence of CEO duality and product market competition attenuate this relationship, whereas the shareholding of institutional investors serves to strengthen it.

This study’s findings can aid policymakers and regulators in China and other emerging economies in policies that promote high-quality ESG information disclosure, taking into account local tournament incentives. Furthermore, the study underscores the importance of maintaining robust corporate governance structures within firms to ensure that CEOs’ self-serving motivations do not undermine ESG disclosure.

This study adds to the ongoing discourse on the significance of ESG disclosure in emerging economies by analyzing the influence of executive promotion incentives on ESG disclosure from an external labor market standpoint. By exploring the potential self-serving motivations of CEOs in promoting ESG values and practices within organizations, this paper addresses a gap in the existing literature.

The purpose of this paper is to investigate the effects of political connections on the association between firms' business strategy and their tax aggressiveness in an emerging economy such as China.

The authors study a large sample of Chinese public firms from 2011 to 2017 using a panel regression model. In addition, a change analysis, an instrument variable test and alternative measures/samples are implemented as robustness tests.

Firms adopting innovative business strategy are more tax aggressive overall. However, innovative firms with political connections are less tax aggressive compared to those without political connections.

This paper contributes to the understanding of firms' tax behaviors in an emerging economy setting. It suggests that there are costs associated with political connections, such as foregone tax saving opportunities, which are understudies in the prior literature.

This paper aims to address the fundamentals of tax planning and seeks to focus on the opportunities and root causes for tax planning.

The paper reviews the current state of tax planning with case studies that reveal fundamental statutory structural opportunities.

While some, possibly many, tax advisers lack integrity and recommend tax structures to their clients that are inconsistent with reasonable interpretations of the tax law, most advisers, even very aggressive and creative advisers, probably do not. The paper suggests that it may be futile to seek to deter tax professionals from designing and marketing tax plans unless legislation makes tax advisers jointly responsible with their clients for their clients’ tax underpayments.

Short of such a radical approach, governments must commit first to altering the basic structure of their tax laws to make aggressive tax planning uninviting.

The paper offers original insights into the inseparability of the legislative process from the creation of unnecessary tax planning opportunities.

This study aims to provide a valuable contribution by exploring the moderating effect of women directors on the relationship between corporate social responsibility (CSR) and corporate tax avoidance of Malaysian listed companies.

The study is based on a sample consisting of 78 Malaysian firms over the 2010–2017 period. A moderation model that specifies the interaction between CSR, women directors and corporate tax avoidance motivates this study.

The results show that a high level of CSR is negatively associated with corporate tax avoidance in firms with a higher percentage of women on the board.

The findings may be of interest to the academic researchers, investors and regulators. For academic researchers, it is interested in discovering the dynamic relation between CSR, woman on the board and tax avoidance. For investors, the results show that the existence of female directors on the board reduces the corporate tax avoidance. For regulators, the results advise the worldwide policy maker to give the importance of female roles to improve the engagement firms in CSR reporting.

This paper extends the existing literature by examining the moderating effect of women directors on the relationship between CSR and corporate tax avoidance in the Malaysian context.