The moderating effect of the board of directors on firm value and tax planning: Evidence from European listed firms

This study examines the moderating effect of the board of directors in the relationship between tax planning and firm value. Focusing on a sample of 105 European firms during the period 2005–2012, we found a positive relationship between tax planning and firm value. In addition, we found that board independence, board diversity, and CEO's dual functions have a significant and negative effect on the relationship between tax planning and firm value. The paper makes two contributions. First, it gathers the first evidence on the shareholder valuation of Europeans firms' tax planning practices and offers insights into corporate behavior. Second, the analysis examines an eight-year period considering the sensitivity of the board of directors and attitudes to tax planning time.