The effect of women's governance in strengthening the relationship between sustainable performance and tax avoidance

Document Type : Scientific paper

Authors

1 Assistant Professor, Department of Accounting, Payame Noor University, Tehran, Iran

2 Management Department, Faculty of Administrative Sciences and Economics, Arak University, Arak, IRAN

3 Assistant Professor, Department of Accounting, Faculty of Economics and Administrative Science, University of Mazandaran, Babolsar, Iran

10.22080/mrl.2025.27892.2120

Abstract

In most countries, a major part of the government's income is obtained through taxes, and the topic of tax avoidance in the world has been attractive to researchers since the past. On the other hand, corporate sustainability and gender diversity have become increasingly important in the current era. This study investigates the impact of board gender diversity and corporate sustainability on tax avoidance in companies listed on the Tehran Stock Exchange from 2017 to 2024. Using a quantile regression model, data from 140 companies over a 7-year period were analyzed. The results indicate that enhanced corporate sustainability performance reduces tax avoidance. Furthermore, greater female representation on the board is associated with decreased tax avoidance, with companies having female board members showing a higher effective tax rate compared to those without. Board gender diversity moderates the relationship between corporate sustainability and tax avoidance, with stronger effects in the middle and upper quantiles of the effective tax rate. Additionally, gender diversity moderates the relationship between firm financial characteristics (size, leverage, return on equity) and tax avoidance. Companies with higher sustainability and greater gender diversity exhibit higher-quality sustainability reporting, contributing to reduced unethical tax behaviors. These findings align with psychological theories (women’s risk aversion and ethical orientation) and stakeholder theory. It is recommended that firms increase female board representation and policymakers introduce tax incentives for sustainability and gender diversity.

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Main Subjects

References

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Macroeconomics Research Letter
Volume 20, Issue 46
August 2025
Pages 155-182

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History

  • Receive Date: 19 October 2024
  • Revise Date: 02 August 2025
  • Accept Date: 30 August 2025

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