Abstract
This study investigates how board characteristics and customer concentration influence corporate tax avoidance, with particular attention to the moderating role of ownership structure in Chinese publicly listed firms. Four dimensions are considered: director compensation, customer concentration, CEO duality, and board expertise. The research draws on annual report data from 100 firms across different industries in China over the period 2013–2023. Tax avoidance is proxied by the effective tax rate (ETR), while ownership structure is measured by the degree of ownership concentration. To address potential endogeneity between governance mechanisms and tax strategies, the study employs a two-step System GMM estimator. The findings reveal that higher customer concentration and CEO duality are associated with greater tax avoidance, whereas director compensation and board expertise are negatively related to it. Moreover, ownership structure significantly moderates these relationships: concentrated ownership strengthens the effectiveness of board compensation and expertise in reducing tax avoidance, while simultaneously amplifying the impact of customer concentration and CEO duality on increasing it. The novelty of this research lies in integrating multiple board attributes into a single framework, situating them within China’s unique institutional and ownership context, and highlighting how governance mechanisms function differently in emerging markets compared to developed economies. These insights contribute to both theory and practice by extending Agency, Upper Echelons, Resource Dependence, Stakeholder, and Political Cost perspectives, and by offering concrete recommendations for policymakers, investors, and boards to improve governance transparency and discourage aggressive tax practices.
Keywords: Board Expertise, CEO Duality, Customer Concentration, Director Compensations, Ownership Structure, Tax Avoidance.