Corporate Governance Bundles and Corporate Tax Avoidance: A Cross Country Study

Abstract

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This study evaluates the effect of corporate governance in bundles form on tax avoidance at the corporate level. The sample includes all listed firms on CompStat in USA and listed on CompStat global. It covers the period from the fiscal year 2002 to 2018 for developed and developing countries. The sample is 12,832 firm-year observations, after excluding those firms whose financial data was not available. This study has taken quantile regression estimates as the basis for statistical tests and drawing inferences. It is observed that some governance mechanisms are complementary to each other whereas some mechanisms are substitutive to each other while affecting decisions and policymaking related to tax avoidance. Findings of the research reveal that corporate governance bundles influence tax avoidance at a corporate level in all economies through the strength of influence differs from country to country.