CEO Sports Hobby and Firms’ Tax Aggressiveness

Shuqing Luo; Terry Shevlin; Lirong Shi; Aimee Shih

doi:10.2308/JATA-19-038

CEO Sports Hobby and Firms’ Tax Aggressiveness

Shuqing Luo, Terry Shevlin, Lirong Shi, Aimee Shih

Research output: Journal Publication › Article › peer-review

1 Citation (Scopus)

Abstract

Recent accounting research suggests that individual executives play a significant role in shaping a firm’s tax planning. Building on psychology research that finds sports interests reflect an individual’s risk-taking preferences, we develop a novel measure of innate and non-pecuniary CEO risk attitudes based on the riskiness of CEOs’ sports hobbies and examine whether the measure is associated with corporate tax aggressiveness. We find that firms managed by CEOs with riskier sports hobbies are more aggressive in their tax planning. This association is more pronounced for CEOs with greater financial incentives and greater power in making decisions. Our results are robust to using alternative measures of CEO sports risks, and after accounting for the self-selection of the disclosure of CEO sports hobbies. Data Availability: Public sources cited in the paper. JEL Classifications: H26; M41; G41; G34.

Original language	English
Pages (from-to)	123-153
Number of pages	31
Journal	Journal of the American Taxation Association
Volume	44
Issue number	1
DOIs	https://doi.org/10.2308/JATA-19-038
Publication status	Published - Jan 2022

Keywords

CEO risk preferences
sports hobbies
tax aggressiveness

ASJC Scopus subject areas

Accounting
Finance

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10.2308/JATA-19-038

Cite this

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abstract = "Recent accounting research suggests that individual executives play a significant role in shaping a firm{\textquoteright}s tax planning. Building on psychology research that finds sports interests reflect an individual{\textquoteright}s risk-taking preferences, we develop a novel measure of innate and non-pecuniary CEO risk attitudes based on the riskiness of CEOs{\textquoteright} sports hobbies and examine whether the measure is associated with corporate tax aggressiveness. We find that firms managed by CEOs with riskier sports hobbies are more aggressive in their tax planning. This association is more pronounced for CEOs with greater financial incentives and greater power in making decisions. Our results are robust to using alternative measures of CEO sports risks, and after accounting for the self-selection of the disclosure of CEO sports hobbies. Data Availability: Public sources cited in the paper. JEL Classifications: H26; M41; G41; G34.",

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CEO Sports Hobby and Firms’ Tax Aggressiveness

Abstract

Keywords

ASJC Scopus subject areas

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