IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2019i1p140-d301178.html
   My bibliography  Save this article

The Effect of Female Employment on Corporate Sustainability in Terms of Tax Avoidance

Author

Listed:
  • Chang Seop Rhee

    (School of Business, Sejong University, 209 Neungdong-ro, Gwangjin-gu, Seoul 05006, Korea)

  • Sohee Woo

    (Global Management, Endicotte College, Woosong University, 171 Dongdaejeon-ro, Dong-gu, Daejeon 34606, Korea)

  • Dong Hyun Kim

    (College of Business and Economics, Chung-Ang University, 84 Heukseok-ro, Dongjak-gu, Seoul 06974, Korea)

Abstract

Recent studies on tax avoidance report that having female executives in companies increases accounting transparency and firm value by reducing tax avoidance. These studies explain that the more risk-averse and conservative characteristics of females affect corporate decision making about tax strategies if the company has female executives. In this study, we assume that the higher the proportion of female employees in a company, the more likely the risk-averse and conservative characteristics of females will affect the firm’s decision making, thereby reducing tax avoidance activities and improving corporate sustainability. To verify this hypothesis, we empirically analyze the association between the female employee ratio and tax avoidance. From the empirical results, we find increasing the female employee ratio may reduce the level of tax avoidance. We also find that companies with a high percentage of female employees show less tax avoidance than those with a low percentage of female employees. The findings suggest that by increasing the ratio of female employees, a company can improve its sustainability in terms of tax avoidance by forming a risk-averse and conservative corporate environment.

Suggested Citation

  • Chang Seop Rhee & Sohee Woo & Dong Hyun Kim, 2019. "The Effect of Female Employment on Corporate Sustainability in Terms of Tax Avoidance," Sustainability, MDPI, vol. 12(1), pages 1-15, December.
  • Handle: RePEc:gam:jsusta:v:12:y:2019:i:1:p:140-:d:301178
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/1/140/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/12/1/140/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Renee B. Adams & Benjamin E. Hermalin & Michael S. Weisbach, 2010. "The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 58-107, March.
    2. repec:zbw:bofrdp:2014_016 is not listed on IDEAS
    3. Xudong Chen & Na Hu & Xue Wang & Xiaofei Tang, 2014. "Tax avoidance and firm value: evidence from China," Nankai Business Review International, Emerald Group Publishing Limited, vol. 5(1), pages 25-42, February.
    4. Kim, Jeong-Bon & Li, Yinghua & Zhang, Liandong, 2011. "Corporate tax avoidance and stock price crash risk: Firm-level analysis," Journal of Financial Economics, Elsevier, vol. 100(3), pages 639-662, June.
    5. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    6. Richard A. Bernardi & Donald F. Arnold, 1997. "An Examination of Moral Development within Public Accounting by Gender, Staff Level, and Firm," Contemporary Accounting Research, John Wiley & Sons, vol. 14(4), pages 653-668, December.
    7. Slemrod, Joel & Yitzhaki, Shlomo, 2002. "Tax avoidance, evasion, and administration," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470, Elsevier.
    8. Slemrod, Joel, 2004. "The Economics of Corporate Tax Selfishness," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(4), pages 877-899, December.
    9. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    10. Huang, Jiekun & Kisgen, Darren J., 2013. "Gender and corporate finance: Are male executives overconfident relative to female executives?," Journal of Financial Economics, Elsevier, vol. 108(3), pages 822-839.
    11. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 620-630, October.
    12. Hanlon, Michelle & Heitzman, Shane, 2010. "A review of tax research," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 127-178, December.
    13. Desai, Mihir A. & Dharmapala, Dhammika, 2006. "Corporate tax avoidance and high-powered incentives," Journal of Financial Economics, Elsevier, vol. 79(1), pages 145-179, January.
    14. Karen A. Bantel & Susan E. Jackson, 1989. "Top management and innovations in banking: Does the composition of the top team make a difference?," Strategic Management Journal, Wiley Blackwell, vol. 10(S1), pages 107-124, June.
    15. Sunden, Annika E & Surette, Brian J, 1998. "Gender Differences in the Allocation of Assets in Retirement Savings Plans," American Economic Review, American Economic Association, vol. 88(2), pages 207-211, May.
    16. Catherine M. Daily & S. Trevis Certo & Dan R. Dalton, 1999. "A decade of corporate women: some progress in the boardroom, none in the executive suite," Strategic Management Journal, Wiley Blackwell, vol. 20(1), pages 93-100, January.
    17. Alexandra Bernasek & Stephanie Shwiff, 2001. "Gender, Risk, and Retirement," Journal of Economic Issues, Taylor & Francis Journals, vol. 35(2), pages 345-356, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:zbw:bofrdp:2014_016 is not listed on IDEAS
    2. Francis, Bill & Hasan, Iftekhar & Wu, Qiang & Yan, Meng, 2014. "Are female CFOs less tax aggressive? Evidence from tax aggressiveness," Research Discussion Papers 16/2014, Bank of Finland.
    3. Berger, Allen N. & Kick, Thomas & Schaeck, Klaus, 2014. "Executive board composition and bank risk taking," Journal of Corporate Finance, Elsevier, vol. 28(C), pages 48-65.
    4. Chang Seop Rhee & Sohee Woo & Hyunjung Rhee, 2023. "Effect of gender diversity on corporate soundness and social contribution," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 419-430, January.
    5. Francis, Bill & Hasan, Iftekhar & Wu, Qiang & Yan, Meng, 2014. "Are female CFOs less tax aggressive? Evidence from tax aggressiveness," Bank of Finland Research Discussion Papers 16/2014, Bank of Finland.
    6. Li, Yiwei & Zeng, Yeqin, 2019. "The impact of top executive gender on asset prices: Evidence from stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 528-550.
    7. Liu, Xiaoxia & Li, Minghui & Tong, Jamie Yixing & Zhang, Feida, 2022. "CFO gender and tax aggressiveness: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 71(C).
    8. Datta, Sudip & Doan, Trang & Toscano, Francesca, 2023. "Top executive gender, corporate culture, and the value of corporate cash holdings," Journal of Financial Stability, Elsevier, vol. 67(C).
    9. Doan, Trang & Iskandar-Datta, Mai, 2020. "Are female top executives more risk-averse or more ethical? Evidence from corporate cash holdings policy," Journal of Empirical Finance, Elsevier, vol. 55(C), pages 161-176.
    10. Shimin Chen & Xu Ni & Jamie Y. Tong, 2016. "Gender Diversity in the Boardroom and Risk Management: A Case of R&D Investment," Journal of Business Ethics, Springer, vol. 136(3), pages 599-621, July.
    11. Baixauli-Soler, J. Samuel & Belda-Ruiz, Maria & Sanchez-Marin, Gregorio, 2015. "Executive stock options, gender diversity in the top management team, and firm risk taking," Journal of Business Research, Elsevier, vol. 68(2), pages 451-463.
    12. Rigolini, Alessandra & Gabaldon, Patricia & Le Bruyn Goldeng, Eskil, 2021. "CEO succession with gender change in troubled companies: The effect of a new woman CEO on firm risk and firm risk perceived," Scandinavian Journal of Management, Elsevier, vol. 37(1).
    13. Datta, Sudip & Doan, Trang & Toscano, Francesca, 2021. "Top executive gender, board gender diversity, and financing decisions: Evidence from debt structure choice," Journal of Banking & Finance, Elsevier, vol. 125(C).
    14. Bill Francis & Iftekhar Hasan & Jong Chool Park & Qiang Wu, 2015. "Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1285-1318, September.
    15. Faccio, Mara & Marchica, Maria-Teresa & Mura, Roberto, 2016. "CEO gender, corporate risk-taking, and the efficiency of capital allocation," Journal of Corporate Finance, Elsevier, vol. 39(C), pages 193-209.
    16. Skała, Dorota & Weill, Laurent, 2018. "Does CEO gender matter for bank risk?," Economic Systems, Elsevier, vol. 42(1), pages 64-74.
    17. Mohammadi, Ali & Shafi, Kourosh, 2015. "The contribution patterns of equity-crowdfunding investors: Gender, Risk aversion and Observational learning," Working Paper Series in Economics and Institutions of Innovation 419, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    18. Francis, Bill B. & Hasan, Iftekhar & Sun, Xian & Wu, Qiang, 2016. "CEO political preference and corporate tax sheltering," Journal of Corporate Finance, Elsevier, vol. 38(C), pages 37-53.
    19. Adhikari, Binay K. & Agrawal, Anup & Malm, James, 2019. "Do women managers keep firms out of trouble? Evidence from corporate litigation and policies," Journal of Accounting and Economics, Elsevier, vol. 67(1), pages 202-225.
    20. Sila, Vathunyoo & Gonzalez, Angelica & Hagendorff, Jens, 2016. "Women on board: Does boardroom gender diversity affect firm risk?," Journal of Corporate Finance, Elsevier, vol. 36(C), pages 26-53.
    21. Liu, Yin & Neely, Pamela & Karim, Khondkar, 2022. "The impact of CFO gender on corporate overinvestment," Advances in accounting, Elsevier, vol. 57(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2019:i:1:p:140-:d:301178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.