Definition of variables
| Variables | Description | Notation |
|---|---|---|
| Panel A: dependent variable | ||
| Effective tax rate | Total tax expense/pre-tax income | ETR |
| Cash flow effective tax rate | Total tax expense/operating cash flows | CFETR |
| Book-tax difference | (Pre-tax book income–estimated taxable income)/total assets | BTD |
| Panel B: independent variable | ||
| Family CEO | 1 if the CEO is the founder or relative of the founder and 0 otherwise | CEO_FAM |
| Panel C: moderating variable | ||
| Board independence | Proportion of independent directors in a board | BIND |
| Panel D: board specific control variables | ||
| Board size | Natural logarithm of number of members in a board | BSIZE |
| Board gender diversity | Proportion of female directors in a board | BGD |
| Board diligence | Natural logarithm of number of board meeting held in a year | BDIL |
| Panel E: firm specific control variables | ||
| Profitability | Ratio of profit before tax to total assets | ROA |
| Leverage | Ratio of total liabilities to total assets | LEV |
| Firm size | Natural logarithm of total assets | FSIZE |
| Firm age | Natural logarithm of years since inception | FAGE |
| Variables | Description | Notation |
|---|---|---|
| Effective tax rate | Total tax expense/pre-tax income | ETR |
| Cash flow effective tax rate | Total tax expense/operating cash flows | CFETR |
| Book-tax difference | (Pre-tax book income–estimated taxable income)/total assets | BTD |
| Family CEO | 1 if the CEO is the founder or relative of the founder and 0 otherwise | CEO_FAM |
| Board independence | Proportion of independent directors in a board | BIND |
| Board size | Natural logarithm of number of members in a board | BSIZE |
| Board gender diversity | Proportion of female directors in a board | BGD |
| Board diligence | Natural logarithm of number of board meeting held in a year | BDIL |
| Profitability | Ratio of profit before tax to total assets | ROA |
| Leverage | Ratio of total liabilities to total assets | LEV |
| Firm size | Natural logarithm of total assets | FSIZE |
| Firm age | Natural logarithm of years since inception | FAGE |
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