CEO narcissism and corporate tax sheltering

Kari Joseph Olsen, James Stekelberg

Research output: Contribution to journalArticle

43 Scopus citations

Abstract

We examine the effect of CEO narcissism on an especially aggressive form of corporate tax avoidance: tax sheltering. Narcissism is a multifaceted personality trait associated with a sense of superiority and a propensity to engage in questionable behavior. Narcissists feel that they are above the law and are aggressive in pursuing what they believe is theirs. Narcissists also possess heightened motivations to pursue rewards or desirable outcomes while only being weakly motivated to avoid negative outcomes. Consistent with these behavioral tendencies of narcissistic individuals, we document statistically and economically significant effects of CEO narcissism on the likelihood that the CEO’s firm engages in corporate tax shelters. Our study contributes to the literature by documenting a mechanism through which the individual personality characteristics of the CEO can affect firm-level tax policies.

Original languageEnglish (US)
Pages (from-to)1-22
Number of pages22
JournalJournal of the American Taxation Association
Volume38
Issue number1
DOIs
StatePublished - Mar 1 2016

Keywords

  • Corporate tax avoidance
  • Corporate tax sheltering
  • Executive personality traits
  • Narcissism
  • Uncertain tax positions

ASJC Scopus subject areas

  • Finance
  • Accounting

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