Are female directors more inclined to avoid risks?

Female directors can influence different company decisions because of their characteristics. However, there is limited evidence on how female directors affect the tax aggressiveness of enterprises. Using the data of listed companies in China from 2013 to 2019, this paper empirically tests the influence of female directors on tax aggressiveness and its internal mechanism. Our findings show that female directors can inhibit tax aggressiveness; this result holds after a series of robust tests. A mechanism test shows that when firms have low risk-taking levels, female directors have a stronger inhibitory effect on tax aggressiveness, indicating that female directors actively pay taxes to avoid risks. A cross-sectional analysis reveals that female directors have different effects on corporate tax aggressiveness under different external factors: marketization degree, social responsibility rating, tax collection, and management intensity. This finding further proves the risk-avoidance mechanism of female directors to inhibit tax aggressiveness. This paper can enrich the understanding of the role of female directors and provide relevant insights for better promoting the construction of a tax governance system.