Females in Corporate Business: Do Ownership and Homophily Matter in the Context of Tax Avoidance?

This study revisits the evidence on the role of females in corporate outcomes by investigating the impact of female shareholders and their interactions with female directors on tax avoidance. We build our investigation on gender socialization and homophily theories and on data from an emerging market, Oman, for the period 2012–2019. Our fixed‐effects regressions reveal that female shareholders are associated with lower tax avoidance. We also find that female shareholders and directors on the board interact to significantly reduce tax avoidance practices. In an additional analysis, we find that the effect of female shareholders is more pronounced in firms with low‐quality audit committees and nonreligious CEOs. Interestingly, we also observe that female shareholders improve the quality of financial reports, consequently reducing tax avoidance. The main findings were verified using various robustness tests including alternative measures and research designs. The novelty of this study is that it provides innocent evidence on the role of female shareholders and their interaction with other females in firm tax activities. [ABSTRACT FROM AUTHOR]