Managerial ability and tax aggressiveness

Purpose The aim of this paper is to examine how managerial ability affects corporate tax aggressiveness. Design/methodology/approach study follows the work Demerjian, Lev, and McVay (2012) quantifies by calculating efficiently managers generate revenues from given economic resources using data envelopment analysis (DEA) approach. uses a wide range measures Firm fixed-effects regressions difference-in-differences approach information regarding CEO turnover control for endogeneity are used. Findings finds negative relationship between Further tests show that more pronounced firms with higher investment opportunities or reputational concerns. Originality/value Given significant costs associated aggressiveness effect it can have on reputation if discovered, results suggest able invest less effort in aggressive avoidance activities. This furthers understanding personal traits affect decision-making.