This study aims to examine the moderating effect of board gender diversity in the relationship between the overconfidence of the CEO and corporate tax avoidance of listed firms in Jordan. Based on upper echelons theory, agency theory, and resource dependence theory, it examines the potential influence of female board representation on the tax implications of managerial overconfidence in an emerging-market context. The study uses panel data of 70 industrial and service enterprises listed on the Amman Stock Exchange (ASE) for the period (2019–2024), yielding 420 firm-year observations. To measure corporate tax avoidance, we use the effective tax rate (ETR) and cash flow effective tax rate (CFETR), and CEO overconfidence is measured by a composite index of observable executive characteristics. The level of board gender diversity is computed as the percentage of female directors, and the hypotheses are tested with panel regression models that include relevant firm-level control variables. The results indicate that CEO overconfidence is negatively and significantly related to ETR, suggesting that the overconfident CEO is more likely to engage in tax avoidance. The moderating results also indicate that the relationship between board gender diversity and tax avoidance is reshaped by enhancing accrual-based tax avoidance and curbing cash-based tax avoidance. The results contribute to the literature on executive traits, corporate governance, and tax behavior by providing evidence from Jordan and by applying a practical measure of CEO overconfidence suitable for contexts with limited data availability.
Shatnawi et al. (Thu,) studied this question.
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