Table A1 Variable definitions and source...

Table A1

Variable definitions and source

	Definitions	[Sources]
Dependent variables
ETR1	The difference between the total book income tax expense and the deferred income tax expenses, scaled by pre-tax accounting income	[CSMAR] (https://data.csmar.com/)
ETR2	Total tax expenses divided by pre-tax accounting income	[CSMAR]
BTD1	The book-tax difference, computed as pre-tax accounting income less estimated taxable income scaled by total assets	[CSMAR]
BTD2	Consistent with Desai and Dharmapala (2006), BTD2 is constructed by first regressing BTD1 on total accruals to remove the influence of accrual-based earnings management. The resulting residual, which captures the portion of BTD1 unexplained by accruals, is then combined with the regression intercept to form BTD2, reflecting the discretionary component of book-tax differences unrelated to standard accounting adjustments	[CSMAR]
Cash_ETR	The ratio of cash taxes paid to pre-tax accounting income minus special items	[CSMAR]
Key independent variables
Financial_D	A binary indicator equal to one if a firm has at least one top manager with financial work experience, and zero otherwise	[CSMAR]
Financial_Ratio	The percentage of top managers with financial work experience on the TMT	[CSMAR]
Financial_CEO	A dummy variable equal to one if the firm's CEO has prior financial work experience, and zero otherwise	[CSMAR]
Financial_Ratio_ExcludingCEO	The ratio of TMT members—excluding the CEO—who possess prior financial industry experience to the total number of non-CEO TMT members	[CSMAR]
RegulatoryFinancial	A dummy variable equal to one if any top executives have prior financial work experience in regulatory-oriented organizations, such as regulatory commissions, policy banks, or stock exchanges, and zero otherwise	[CSMAR]
NonregulatoryFinancial	A dummy variable equal to one if any top executives previously worked in non-regulatory financial authorities, and zero otherwise	[CSMAR]
RegulatoryFinancial_Ratio	The proportion of top managers with prior financial experience in regulatory-oriented authorities relative to the total number of top managers in the firm	[CSMAR]
NonregulatoryFinancial_Ratio	The proportion of top managers with experience in non-regulatory financial institutions	[CSMAR]
Financial_NewlyAppointed	A binary variable assigned a value of one if an entity transitions from having no financially expert top executives in the prior year to having at least one financially expert top executive in the current year, and zero otherwise	[CSMAR]
Financial_Increment	A binary variable assigned a value of one if the number of top executives with financial work experience increases from the previous year, provided that the firm had at least one financially experienced executive in the prior year, and zero otherwise	[CSMAR]
Financial_Departure	A binary variable assigned a value of one if an entity transitions from having financially expert top executives in the prior year to having none in the current year, and zero otherwise	[CSMAR]
Financial_Decrease	A binary variable assigned a value of one if an entity experiences a decrease in the number of financially expert top executives compared to the previous year, and zero otherwise	[CSMAR]
Percentage_FinancialExe_Province	The ratio of financially experienced top executives to all top executives in other firms within the same province in the prior year	[CSMAR]
Percentage_FinancialCEO_Province	The proportion of CEOs with prior financial institution experience among all CEOs in the same province in the preceding year, excluding the focal firm	[CSMAR]
Control Variables
Cross_Listing	A binary indicator assigned a value of one if the company is cross-listed, including listings on the Hong Kong Stock Exchange, and zero if it is not	[CSMAR]
InternalControl_Quality	The natural logarithm of the internal control index score	[Dibo Internal Control Dataset](http://www.dibtime.com/)
Institutional_Ownership	The proportion of shares held by institutional investors	[CSMAR]
Violation	A binary variable equal to one if a firm was subject to formal regulatory action in the prior year, including criticism, warning, reprimand, monetary fine, confiscation of illegal proceeds, revocation of business license (or closure order), market entry ban, or other disciplinary measures, and zero otherwise	[CSMAR]
SOE	A binary indicator equal to one if the firm's ultimate controlling entity is the central government, a local government, or an affiliated governmental agency, and zero if otherwise privately controlled	[CSMAR]
Size	The logarithmic transformation of a firm's total assets measured at book value	[CSMAR]
Age	The natural logarithm of the number of years elapsed since the firm's initial public listing	[CSMAR]
Tangibility	The proportion of a firm's tangible assets relative to its total assets	[CSMAR]
Lev	The ratio of total liabilities (both short-term and long-term) to total assets	[CSMAR]
RD	The ratio of research and development (R&D) spending to total assets	[CSMAR]
ROA	Earnings before interest and taxes (EBIT) divided by the book value of total assets	[CSMAR]
Growth	The year-over-year growth rate of total revenues	[CSMAR]
Duality	A binary variable equal to one if the roles of CEO and board chair are held by the same individual, and zero otherwise	[CSMAR]
Independence	The ratio of independent directors in the boardroom	[CSMAR]
Female	The proportion of board members who are women	[CSMAR]
Loss	A binary variable equal to one if the firm incurred a negative net income in the previous year, and zero if it reported a profit	[CSMAR]
TotalAccruals	The difference between net income and operating cash flow, normalized by the book value of total assets	[CSMAR]
TMT_Age	The natural logarithm of the average age of TMT members for a firm each year	[CSMAR]
TMT_Foreign	The share of TMT members who possess international work or educational experience	[CSMAR]
TMT_Academic	The percentage of top executives with academic experience on the TMT	[CSMAR]
Extended Study
MTB	The ratio of a firm's market capitalization to its book value of shareholders' equity	[CSMAR]
Tobin's_Q	The proportion obtained by adding market value of equity to total liabilities (i.e. total assets minus book equity), then dividing the sum by total assets	[CSMAR]

	Definitions	[Sources]
Dependent variables
ETR1	The difference between the total book income tax expense and the deferred income tax expenses, scaled by pre-tax accounting income	[CSMAR] (https://data.csmar.com/)
ETR2	Total tax expenses divided by pre-tax accounting income	[CSMAR]
BTD1	The book-tax difference, computed as pre-tax accounting income less estimated taxable income scaled by total assets	[CSMAR]
BTD2	Consistent with Desai and Dharmapala (2006), BTD2 is constructed by first regressing BTD1 on total accruals to remove the influence of accrual-based earnings management. The resulting residual, which captures the portion of BTD1 unexplained by accruals, is then combined with the regression intercept to form BTD2, reflecting the discretionary component of book-tax differences unrelated to standard accounting adjustments	[CSMAR]
Cash_ETR	The ratio of cash taxes paid to pre-tax accounting income minus special items	[CSMAR]
Key independent variables
Financial_D	A binary indicator equal to one if a firm has at least one top manager with financial work experience, and zero otherwise	[CSMAR]
Financial_Ratio	The percentage of top managers with financial work experience on the TMT	[CSMAR]
Financial_CEO	A dummy variable equal to one if the firm's CEO has prior financial work experience, and zero otherwise	[CSMAR]
Financial_Ratio_ExcludingCEO	The ratio of TMT members—excluding the CEO—who possess prior financial industry experience to the total number of non-CEO TMT members	[CSMAR]
RegulatoryFinancial	A dummy variable equal to one if any top executives have prior financial work experience in regulatory-oriented organizations, such as regulatory commissions, policy banks, or stock exchanges, and zero otherwise	[CSMAR]
NonregulatoryFinancial	A dummy variable equal to one if any top executives previously worked in non-regulatory financial authorities, and zero otherwise	[CSMAR]
RegulatoryFinancial_Ratio	The proportion of top managers with prior financial experience in regulatory-oriented authorities relative to the total number of top managers in the firm	[CSMAR]
NonregulatoryFinancial_Ratio	The proportion of top managers with experience in non-regulatory financial institutions	[CSMAR]
Financial_NewlyAppointed	A binary variable assigned a value of one if an entity transitions from having no financially expert top executives in the prior year to having at least one financially expert top executive in the current year, and zero otherwise	[CSMAR]
Financial_Increment	A binary variable assigned a value of one if the number of top executives with financial work experience increases from the previous year, provided that the firm had at least one financially experienced executive in the prior year, and zero otherwise	[CSMAR]
Financial_Departure	A binary variable assigned a value of one if an entity transitions from having financially expert top executives in the prior year to having none in the current year, and zero otherwise	[CSMAR]
Financial_Decrease	A binary variable assigned a value of one if an entity experiences a decrease in the number of financially expert top executives compared to the previous year, and zero otherwise	[CSMAR]
Percentage_FinancialExe_Province	The ratio of financially experienced top executives to all top executives in other firms within the same province in the prior year	[CSMAR]
Percentage_FinancialCEO_Province	The proportion of CEOs with prior financial institution experience among all CEOs in the same province in the preceding year, excluding the focal firm	[CSMAR]
Control Variables
Cross_Listing	A binary indicator assigned a value of one if the company is cross-listed, including listings on the Hong Kong Stock Exchange, and zero if it is not	[CSMAR]
InternalControl_Quality	The natural logarithm of the internal control index score	[Dibo Internal Control Dataset](http://www.dibtime.com/)
Institutional_Ownership	The proportion of shares held by institutional investors	[CSMAR]
Violation	A binary variable equal to one if a firm was subject to formal regulatory action in the prior year, including criticism, warning, reprimand, monetary fine, confiscation of illegal proceeds, revocation of business license (or closure order), market entry ban, or other disciplinary measures, and zero otherwise	[CSMAR]
SOE	A binary indicator equal to one if the firm's ultimate controlling entity is the central government, a local government, or an affiliated governmental agency, and zero if otherwise privately controlled	[CSMAR]
Size	The logarithmic transformation of a firm's total assets measured at book value	[CSMAR]
Age	The natural logarithm of the number of years elapsed since the firm's initial public listing	[CSMAR]
Tangibility	The proportion of a firm's tangible assets relative to its total assets	[CSMAR]
Lev	The ratio of total liabilities (both short-term and long-term) to total assets	[CSMAR]
RD	The ratio of research and development (R&D) spending to total assets	[CSMAR]
ROA	Earnings before interest and taxes (EBIT) divided by the book value of total assets	[CSMAR]
Growth	The year-over-year growth rate of total revenues	[CSMAR]
Duality	A binary variable equal to one if the roles of CEO and board chair are held by the same individual, and zero otherwise	[CSMAR]
Independence	The ratio of independent directors in the boardroom	[CSMAR]
Female	The proportion of board members who are women	[CSMAR]
Loss	A binary variable equal to one if the firm incurred a negative net income in the previous year, and zero if it reported a profit	[CSMAR]
TotalAccruals	The difference between net income and operating cash flow, normalized by the book value of total assets	[CSMAR]
TMT_Age	The natural logarithm of the average age of TMT members for a firm each year	[CSMAR]
TMT_Foreign	The share of TMT members who possess international work or educational experience	[CSMAR]
TMT_Academic	The percentage of top executives with academic experience on the TMT	[CSMAR]
Extended Study
MTB	The ratio of a firm's market capitalization to its book value of shareholders' equity	[CSMAR]
Tobin's_Q	The proportion obtained by adding market value of equity to total liabilities (i.e. total assets minus book equity), then dividing the sum by total assets	[CSMAR]

Source(s): Authors’ own work

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Table A2

The moderating roles of institutional ownership and regulatory violation pressure in the interplay among regulatory financial executive experience, non-regulatory financial executive experience, and effective tax rates

Dependent variable = ETR1
Dependent variable = ETR1	(1)	(2)	(3)	(4)
RegulatoryFinancial × Institutional_Ownership	−0.000
RegulatoryFinancial × Institutional_Ownership	(−0.235)
NonregulatoryFinancial × Institutional_Ownership	−0.001*
NonregulatoryFinancial × Institutional_Ownership	(−1.689)
Institutional_Ownership	−0.001***	−0.001***
Institutional_Ownership	(−3.330)	(−3.674)
RegulatoryFinancial_Ratio × Institutional_Ownership		−0.001
RegulatoryFinancial_Ratio × Institutional_Ownership		(−0.071)
NonregulatoryFinancial_Ratio × Institutional_Ownership		−0.004**
NonregulatoryFinancial_Ratio × Institutional_Ownership		(−2.149)
RegulatoryFinancial	0.007		0.009
RegulatoryFinancial	(0.251)		(0.459)
NonregulatoryFinancial	−0.008*		−0.009***
NonregulatoryFinancial	(−1.661)		(−2.683)
RegulatoryFinancial_Ratio		0.103		0.072
RegulatoryFinancial_Ratio		(0.795)		(0.979)
NonregulatoryFinancial_Ratio		−0.040*		−0.032**
NonregulatoryFinancial_Ratio		(−1.793)		(−2.053)
Violation			0.007	−0.005
Violation			(0.399)	(−0.300)
RegulatoryFinancial × Violation			−0.091
RegulatoryFinancial × Violation			(−0.788)
NonregulatoryFinancial × Violation			−0.067***
NonregulatoryFinancial × Violation			(−2.698)
RegulatoryFinancial_Ratio × Violation				−0.416
RegulatoryFinancial_Ratio × Violation				(−0.514)
NonregulatoryFinancial_Ratio × Violation				−0.160
NonregulatoryFinancial_Ratio × Violation				(−1.602)
_cons	−0.142	−0.137	−0.142	−0.144
_cons	(−1.634)	(−1.574)	(−1.592)	(−1.620)
Control variables used in Eq. (1)	Yes	Yes	Yes	Yes
Year fixed effects?	Yes	Yes	Yes	Yes
Industry fixed effects?	Yes	Yes	Yes	Yes
Province fixed effects?	Yes	Yes	Yes	Yes
SEs. Clustered at	Firm, Year	Firm, Year	Firm, Year	Firm, Year
No. of obs	17,033	17,033	18,247	18,247
Adj. R-square	0.057	0.057	0.058	0.057

Dependent variable = ETR1
Dependent variable = ETR1	(1)	(2)	(3)	(4)
RegulatoryFinancial × Institutional_Ownership	−0.000
RegulatoryFinancial × Institutional_Ownership	(−0.235)
NonregulatoryFinancial × Institutional_Ownership	−0.001*
NonregulatoryFinancial × Institutional_Ownership	(−1.689)
Institutional_Ownership	−0.001***	−0.001***
Institutional_Ownership	(−3.330)	(−3.674)
RegulatoryFinancial_Ratio × Institutional_Ownership		−0.001
RegulatoryFinancial_Ratio × Institutional_Ownership		(−0.071)
NonregulatoryFinancial_Ratio × Institutional_Ownership		−0.004**
NonregulatoryFinancial_Ratio × Institutional_Ownership		(−2.149)
RegulatoryFinancial	0.007		0.009
RegulatoryFinancial	(0.251)		(0.459)
NonregulatoryFinancial	−0.008*		−0.009***
NonregulatoryFinancial	(−1.661)		(−2.683)
RegulatoryFinancial_Ratio		0.103		0.072
RegulatoryFinancial_Ratio		(0.795)		(0.979)
NonregulatoryFinancial_Ratio		−0.040*		−0.032**
NonregulatoryFinancial_Ratio		(−1.793)		(−2.053)
Violation			0.007	−0.005
Violation			(0.399)	(−0.300)
RegulatoryFinancial × Violation			−0.091
RegulatoryFinancial × Violation			(−0.788)
NonregulatoryFinancial × Violation			−0.067***
NonregulatoryFinancial × Violation			(−2.698)
RegulatoryFinancial_Ratio × Violation				−0.416
RegulatoryFinancial_Ratio × Violation				(−0.514)
NonregulatoryFinancial_Ratio × Violation				−0.160
NonregulatoryFinancial_Ratio × Violation				(−1.602)
_cons	−0.142	−0.137	−0.142	−0.144
_cons	(−1.634)	(−1.574)	(−1.592)	(−1.620)
Control variables used in Eq. (1)	Yes	Yes	Yes	Yes
Year fixed effects?	Yes	Yes	Yes	Yes
Industry fixed effects?	Yes	Yes	Yes	Yes
Province fixed effects?	Yes	Yes	Yes	Yes
SEs. Clustered at	Firm, Year	Firm, Year	Firm, Year	Firm, Year
No. of obs	17,033	17,033	18,247	18,247
Adj. R-square	0.057	0.057	0.058	0.057

Note(s): This table reports the moderating effects of internal institutional ownership and external regulatory violation pressure on the link between managerial financial experience in regulatory-oriented and non-regulatory-oriented institutions and corporate tax aggressiveness. ***, **, and * denote statistical significance at the 1%, 5%, and 10% levels, respectively

Source(s): Authors’ own work

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