Antecedents of tax aggressiveness of listed non-financial firms: Evidence from an emerging economy

Abstract

The study examined the antecedents of aggressive tax behaviour among listed non-financial firms in Ghana. With firm-level data for 19 non-financial firms covering the period 2010–2019, we employed the system GMM approach. Our findings underscore the significance of political connection and financial constraint as primary drivers of tax aggressiveness among listed non-financial firms in Ghana. The relationship between capital structure and tax aggressive behaviours is mixed. Our findings establish the ability of corporate governance measures – such as board size, board gender diversity and independent directors – to increase tax aggressive behaviours of listed non-financial corporations in Ghana. Policymakers could examine and evaluate the operability or enforcement of internal corporate governance practices among listed non-financial firms to limit the extent of tax aggressiveness which would, in turn, ensure high tax revenue mobilisation for the government. External governance measures such as institutional ownership and ownership structure policies could be evaluated to further ensure less tax aggressive behaviours from firms.

Keywords

• Tax aggressiveness
• Political connection
• Financial constraints
• Ghana
• Corporate Social Responsibility
• Generalised Method of Moments