Abstract
This paper investigates the effect of the founder's in-laws involved in management on corporate tax avoidance in family firms. Using a sample of Chinese-listed family firms from 2008 to 2018, we find that in-laws’ involvement can significantly increase tax avoidance. We also show that both tax enforcement efforts and social trust mitigate the positive effect. Further analysis indicates that in-law CEOs are more tax aggressive than other types of CEOs. Overall, our paper provides empirical evidence for understanding how in-laws’ involvement shapes tax management activities from the perspective of agency conflict, extending the existing literature.
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