The Impact of Ownership Structure on Corporate Tax Avoidance: Moderating Role of Board Governance

Abstract

This study examines how board governance moderates the effect of ownership structure and corporate tax avoidance. This study uses panel dataset of 20 firms listed on the Ghana Stock Exchange between 2013–2022. The study hypotheses were tested by using fixed and random effect panel regression analysis. The study found foreign ownership and institutional cross-ownership positively affect tax avoidance in the firms. The study also found that board governance moderates the relationship between ownership structure and corporate tax avoidance. The study reveals that foreign ownership and institutional cross-ownership positively influence corporate tax avoidance, with board governance playing a critical moderating role. These findings suggest organizations should develop transparent tax strategies that balance financial optimization with ethical considerations, prioritize board independence and expertise, and establish robust monitoring mechanisms. By recognizing the complex interplay between ownership structures and tax planning, companies can create more sophisticated approaches that protect long-term stakeholder value while maintaining strategic financial flexibility. This study is among the few attempt to move the ownership structure and tax avoidance discourse from a univariate to explaining the moderating role of board governance. Thus, the study demonstrates that while OS may independently drive tax avoidance, the nature of board governance could amplify the effect of ownership structure.