Table 4 Channel analysis: the impact of...

Table 4

Channel analysis: the impact of managerial financial experience in regulatory and non-regulatory authorities on tax aggressiveness

Dependent variable =	ETR1	ETR1	ETR2	ETR2	BTD1	BTD1	BTD2	BTD2
Dependent variable =	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Regulatory financial	0.005		0.001		0.002		−0.001
Regulatory financial	(0.285)		(0.065)		(0.972)		(−0.488)
NonregulatoryFinancial	−0.010***		−0.005**		0.002***		0.001***
NonregulatoryFinancial	(−3.073)		(−2.061)		(4.253)		(2.687)
RegulatoryFinancial_Ratio		0.019		0.056		0.005		−0.018
RegulatoryFinancial_Ratio		(0.260)		(0.882)		(0.440)		(−1.316)
NonregulatoryFinancial_Ratio		−0.032**		−0.026*		0.013***		0.010***
NonregulatoryFinancial_Ratio		(−1.982)		(−1.923)		(4.531)		(3.729)
SOE	0.003	0.004	0.008**	0.008**	−0.001	−0.001	−0.001	−0.001
SOE	(0.839)	(0.980)	(2.515)	(2.561)	(−1.555)	(−1.610)	(−0.909)	(−0.887)
Size	0.011***	0.011***	0.007***	0.007***	−0.001***	−0.001***	−0.000	−0.000
Size	(7.396)	(7.266)	(5.968)	(5.863)	(−3.066)	(−2.851)	(−0.782)	(−0.628)
Age	−0.001	−0.000	0.003**	0.004**	0.003***	0.003***	0.002***	0.002***
Age	(−0.301)	(−0.190)	(2.386)	(2.485)	(8.283)	(8.051)	(5.191)	(5.025)
Tangibility	0.025	0.025	0.030**	0.030**	0.008**	0.007**	0.006**	0.006**
Tangibility	(1.409)	(1.421)	(2.097)	(2.113)	(2.493)	(2.456)	(2.069)	(2.049)
Lev	0.030***	0.030***	0.005	0.005	−0.004**	−0.004**	−0.004**	−0.004**
Lev	(3.091)	(3.097)	(0.621)	(0.630)	(−2.256)	(−2.275)	(−2.469)	(−2.485)
RD	−0.706***	−0.702***	−0.816***	−0.816***	0.163***	0.164***	0.157***	0.158***
RD	(−6.846)	(−6.802)	(−9.899)	(−9.888)	(8.755)	(8.802)	(8.296)	(8.349)
ROA	0.139***	0.141***	0.257***	0.258***	0.041***	0.040***	0.044***	0.044***
ROA	(4.699)	(4.767)	(10.440)	(10.491)	(5.653)	(5.554)	(6.765)	(6.699)
Growth	0.012***	0.012***	0.013***	0.013***	0.001*	0.001*	0.001***	0.001***
Growth	(4.634)	(4.652)	(6.041)	(6.063)	(1.829)	(1.765)	(3.093)	(3.045)
Duality	0.002	0.002	−0.001	−0.001	−0.000	−0.000	0.000	0.000
Duality	(0.536)	(0.545)	(−0.343)	(−0.324)	(−0.285)	(−0.328)	(0.325)	(0.280)
Independence	0.041	0.041	0.029	0.029	0.007*	0.007*	−0.001	−0.001
Independence	(1.491)	(1.496)	(1.340)	(1.351)	(1.687)	(1.666)	(−0.198)	(−0.222)
Female	0.027*	0.027*	0.023**	0.023**	−0.001	−0.001	−0.002	−0.002
Female	(1.786)	(1.803)	(2.005)	(2.018)	(−0.252)	(−0.294)	(−0.995)	(−1.028)
Loss	−0.019**	−0.019**	−0.012*	−0.012*	0.008***	0.008***	0.007***	0.007***
Loss	(−2.225)	(−2.217)	(−1.695)	(−1.683)	(6.773)	(6.741)	(5.737)	(5.704)
TotalAccruals	−0.012	−0.013	−0.072***	−0.072***	−0.004	−0.004	−0.023***	−0.023***
TotalAccruals	(−0.611)	(−0.647)	(−4.463)	(−4.473)	(−0.972)	(−0.952)	(−6.079)	(−6.087)
TMT_Age	−0.016	−0.016	0.015	0.015	−0.006**	−0.006*	−0.002	−0.002
TMT_Age	(−0.789)	(−0.754)	(0.928)	(0.925)	(−1.984)	(−1.883)	(−0.591)	(−0.486)
TMT_Foreign	0.023	0.023	−0.008	−0.008	0.000	−0.000	−0.000	−0.001
TMT_Foreign	(1.506)	(1.484)	(−0.711)	(−0.700)	(0.046)	(−0.033)	(−0.165)	(−0.263)
TMT_Academic	0.005	0.005	−0.005	−0.005	−0.002	−0.002	−0.003	−0.003*
TMT_Academic	(0.485)	(0.481)	(−0.610)	(−0.618)	(−1.008)	(−1.092)	(−1.621)	(−1.693)
_cons	−0.187**	−0.187**	−0.210***	−0.209***	0.072***	0.069***	0.044***	0.042***
_cons	(−2.189)	(−2.186)	(−3.109)	(−3.081)	(5.211)	(5.043)	(3.278)	(3.127)
Year fixed effects?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry fixed effects?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Province fixed effects?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
SEs. Clustered at	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year
No. of obs	18,253	18,253	21,912	21,912	15,746	15,746	15,667	15,667
Adj. R-square	0.058	0.057	0.066	0.066	0.117	0.117	0.098	0.099

Dependent variable =	ETR1	ETR1	ETR2	ETR2	BTD1	BTD1	BTD2	BTD2
Dependent variable =	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Regulatory financial	0.005		0.001		0.002		−0.001
Regulatory financial	(0.285)		(0.065)		(0.972)		(−0.488)
NonregulatoryFinancial	−0.010***		−0.005**		0.002***		0.001***
NonregulatoryFinancial	(−3.073)		(−2.061)		(4.253)		(2.687)
RegulatoryFinancial_Ratio		0.019		0.056		0.005		−0.018
RegulatoryFinancial_Ratio		(0.260)		(0.882)		(0.440)		(−1.316)
NonregulatoryFinancial_Ratio		−0.032**		−0.026*		0.013***		0.010***
NonregulatoryFinancial_Ratio		(−1.982)		(−1.923)		(4.531)		(3.729)
SOE	0.003	0.004	0.008**	0.008**	−0.001	−0.001	−0.001	−0.001
SOE	(0.839)	(0.980)	(2.515)	(2.561)	(−1.555)	(−1.610)	(−0.909)	(−0.887)
Size	0.011***	0.011***	0.007***	0.007***	−0.001***	−0.001***	−0.000	−0.000
Size	(7.396)	(7.266)	(5.968)	(5.863)	(−3.066)	(−2.851)	(−0.782)	(−0.628)
Age	−0.001	−0.000	0.003**	0.004**	0.003***	0.003***	0.002***	0.002***
Age	(−0.301)	(−0.190)	(2.386)	(2.485)	(8.283)	(8.051)	(5.191)	(5.025)
Tangibility	0.025	0.025	0.030**	0.030**	0.008**	0.007**	0.006**	0.006**
Tangibility	(1.409)	(1.421)	(2.097)	(2.113)	(2.493)	(2.456)	(2.069)	(2.049)
Lev	0.030***	0.030***	0.005	0.005	−0.004**	−0.004**	−0.004**	−0.004**
Lev	(3.091)	(3.097)	(0.621)	(0.630)	(−2.256)	(−2.275)	(−2.469)	(−2.485)
RD	−0.706***	−0.702***	−0.816***	−0.816***	0.163***	0.164***	0.157***	0.158***
RD	(−6.846)	(−6.802)	(−9.899)	(−9.888)	(8.755)	(8.802)	(8.296)	(8.349)
ROA	0.139***	0.141***	0.257***	0.258***	0.041***	0.040***	0.044***	0.044***
ROA	(4.699)	(4.767)	(10.440)	(10.491)	(5.653)	(5.554)	(6.765)	(6.699)
Growth	0.012***	0.012***	0.013***	0.013***	0.001*	0.001*	0.001***	0.001***
Growth	(4.634)	(4.652)	(6.041)	(6.063)	(1.829)	(1.765)	(3.093)	(3.045)
Duality	0.002	0.002	−0.001	−0.001	−0.000	−0.000	0.000	0.000
Duality	(0.536)	(0.545)	(−0.343)	(−0.324)	(−0.285)	(−0.328)	(0.325)	(0.280)
Independence	0.041	0.041	0.029	0.029	0.007*	0.007*	−0.001	−0.001
Independence	(1.491)	(1.496)	(1.340)	(1.351)	(1.687)	(1.666)	(−0.198)	(−0.222)
Female	0.027*	0.027*	0.023**	0.023**	−0.001	−0.001	−0.002	−0.002
Female	(1.786)	(1.803)	(2.005)	(2.018)	(−0.252)	(−0.294)	(−0.995)	(−1.028)
Loss	−0.019**	−0.019**	−0.012*	−0.012*	0.008***	0.008***	0.007***	0.007***
Loss	(−2.225)	(−2.217)	(−1.695)	(−1.683)	(6.773)	(6.741)	(5.737)	(5.704)
TotalAccruals	−0.012	−0.013	−0.072***	−0.072***	−0.004	−0.004	−0.023***	−0.023***
TotalAccruals	(−0.611)	(−0.647)	(−4.463)	(−4.473)	(−0.972)	(−0.952)	(−6.079)	(−6.087)
TMT_Age	−0.016	−0.016	0.015	0.015	−0.006**	−0.006*	−0.002	−0.002
TMT_Age	(−0.789)	(−0.754)	(0.928)	(0.925)	(−1.984)	(−1.883)	(−0.591)	(−0.486)
TMT_Foreign	0.023	0.023	−0.008	−0.008	0.000	−0.000	−0.000	−0.001
TMT_Foreign	(1.506)	(1.484)	(−0.711)	(−0.700)	(0.046)	(−0.033)	(−0.165)	(−0.263)
TMT_Academic	0.005	0.005	−0.005	−0.005	−0.002	−0.002	−0.003	−0.003*
TMT_Academic	(0.485)	(0.481)	(−0.610)	(−0.618)	(−1.008)	(−1.092)	(−1.621)	(−1.693)
_cons	−0.187**	−0.187**	−0.210***	−0.209***	0.072***	0.069***	0.044***	0.042***
_cons	(−2.189)	(−2.186)	(−3.109)	(−3.081)	(5.211)	(5.043)	(3.278)	(3.127)
Year fixed effects?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Industry fixed effects?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Province fixed effects?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
SEs. Clustered at	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year	Firm, Year
No. of obs	18,253	18,253	21,912	21,912	15,746	15,746	15,667	15,667
Adj. R-square	0.058	0.057	0.066	0.066	0.117	0.117	0.098	0.099

Note(s): The table presents the empirical results on the relationship between top managers' financial experience in regulatory and non-regulatory authorities and corporate tax aggressiveness. Regulatory Financial is a dummy variable equal to one if any top managers have prior financial work experience in regulatory-oriented institutions—such as regulatory commissions, policy banks, or stock exchanges—and zero otherwise. Nonregulatory Financial equals one if any top managers previously worked in non-regulatory financial authorities, and zero otherwise. Regulatory Financial_Ratio is defined as the proportion of top managers with prior financial experience in regulatory-oriented authorities relative to the total number of top managers in the firm. Similarly, Nonregulatory Financial_Ratio measures the proportion of top managers with experience in non-regulatory financial institutions. All independent variables are lagged by one year except for Growth and Loss. Detailed variable definitions can be found in Table A1 of the Appendix section. ***, **, and * denote significance at the 1%, 5%, and 10% levels, respectively

Source(s): Authors’ own work

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