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Nationality Diversity in Corporate Boards and Tax Avoidance: Evidence from Oman

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  • Badar Alshabibi

    (Faculty of Business Studies, University of Technology and Applied Sciences, Muscat 133, Oman)

  • Shanmuga Pria

    (Faculty of Business Studies, University of Technology and Applied Sciences, Shinas 324, Oman)

  • Khaled Hussainey

    (Faculty of Business and Law, Portsmouth University, Portsmouth PO1 2UP, UK)

Abstract

We examine the impact of nationality diversity in corporate boards on tax avoidance by assessing whether foreign directors play monitoring or advisory roles. We use a sample of 1049 firm-year observations from companies listed on the Muscat Stock Exchange between 2009 and 2019. We find that board nationality and audit committee nationality are associated with lower effective tax rates, which equated to more tax avoidance (an advisory role). Our findings offer an important implication for policymakers who are interested in determinants of and mechanisms to prevent tax avoidance. The implication is that caution should be exercised when appointing foreign directors to the board of directors in Oman.

Suggested Citation

  • Badar Alshabibi & Shanmuga Pria & Khaled Hussainey, 2022. "Nationality Diversity in Corporate Boards and Tax Avoidance: Evidence from Oman," Administrative Sciences, MDPI, vol. 12(3), pages 1-12, August.
    • Handle: RePEc:gam:jadmsc:v:12:y:2022:i:3:p:111-:d:902698
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    References listed on IDEAS

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