Trinh, Vu Quang and Li, Teng and Ha, Oanh and Liu, Jia (2025) Board busyness and financial leverage: The impact of corporate tax avoidance. Financial Review, 60 (3). pp. 951-1002. DOI https://doi.org/10.1111/fire.12434
Trinh, Vu Quang and Li, Teng and Ha, Oanh and Liu, Jia (2025) Board busyness and financial leverage: The impact of corporate tax avoidance. Financial Review, 60 (3). pp. 951-1002. DOI https://doi.org/10.1111/fire.12434
Trinh, Vu Quang and Li, Teng and Ha, Oanh and Liu, Jia (2025) Board busyness and financial leverage: The impact of corporate tax avoidance. Financial Review, 60 (3). pp. 951-1002. DOI https://doi.org/10.1111/fire.12434
Abstract
This study investigates the impact of “busy” independent directors on corporate financial leverage. Using a sample of 3321 Chinese listed firms from 2004 to 2019, we find that firms with busier boards tend to have higher leverage, with corporate tax avoidance acting as a mediating mechanism. Supporting the reputational incentive hypothesis, busy boards discourage aggressive tax avoidance strategies that would otherwise allow managers to accumulate excess cash reserves. Consequently, these firms become more reliant on external debt financing to meet potential investment needs. Our findings highlight the role of “busy” independent directors in mitigating agency conflicts and shaping financial strategies.
Item Type: | Article |
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Uncontrolled Keywords: | board busyness; busy independent directors; corporate tax avoidance; financial leverage |
Divisions: | Faculty of Social Sciences > Essex Business School Faculty of Social Sciences > Essex Business School > Essex Accounting Centre |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 28 Jul 2025 14:30 |
Last Modified: | 28 Jul 2025 14:31 |
URI: | http://repository.essex.ac.uk/id/eprint/40416 |
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