Congratulations to Dr Vu Trinh and his co-authors, whose article \u2018Board Busyness and Financial Leverage: The Impact of Corporate Tax Avoidance\u2019 has been published in The Financial Review.<\/i><\/p>\n
This study investigates the impact of \u2018busy\u2019 independent directors on corporate financial leverage. Using a sample of 3,321 Chinese listed firms from 2004 to 2019, we find that firms with busier boards tend to have higher leverage, with corporate tax avoidance acting as a mediating mechanism. Supporting the reputational incentive hypothesis, busy boards discourage aggressive tax avoidance strategies that would otherwise allow managers to accumulate excess cash reserves. Consequently, these firms become more reliant on external debt financing to meet potential investment needs. Our findings highlight the role of \u2018busy\u2019 independent directors in mitigating agency conflicts and shaping financial strategies.<\/p>\n","protected":false},"excerpt":{"rendered":"