When earnings quality matters: Tax avoidance behavior under family ownership in emerging markets

Prior literature has demonstrated that tax avoidance is not merely a financial decision, but is also associated with corporate transparency and earnings quality (Li et al., 2026; Benkraiem et al., 2024). Accordingly, this study investigates the relationship between earnings quality and tax avoidance and examines whether family ownership moderates this relationship among Jordanian listed firms. Using a quantitative approach, the study analyzes panel data from 69 firms listed on the Amman Stock Exchange (ASE) over the period 2010–2024. Panel-corrected standard errors (PCSE) effects of panel regression models were applied to control for heteroscedasticity and autocorrelation. The results show that earnings quality is associated with lower levels of tax avoidance, supporting the view that firms with high levels of transparency adopt more compliant tax behaviour. Moreover, family ownership enhances the relationship between earnings quality and tax avoidance. This study contributes to the literature by offering new evidence that greater earnings quality—measured by accruals and earnings persistence—serves as an effective internal governance mechanism that limits corporate tax avoidance, while illustrating that family ownership significantly influences this relationship in an emerging market context. The findings provide meaningful implications for regulators concerned with the governance role of family ownership in mitigating tax avoidance through improved earnings quality.