CEO locality and tax avoidance

This study investigates whether CEOs’ geographic attachment to their firms’ headquarters affects corporate tax avoidance. Drawing on place attachment theory, we predict that local CEOs (i.e. those born in the same state as the headquarters) face higher social costs of aggressive tax strategies. Using a sample of U.S. firms, we find that firms led by local CEOs exhibit lower tax avoidance, especially when under weaker performance pressure. Overall, our findings suggest that geographic identity serves as an informal constraint on corporate tax behaviour.