This paper develops two new measures of labor tax avoidance based on social contribution expenses reported in financial statements and tests them and their determinants within a sample of 224 Italian firms defined as legally registered Mafia firms due to having been confiscated at some point by judicial authorities, in relation to alleged connections with Italian organized crime. Overall, our results reveal that before confiscation LMFs engage more in LTAV than lawful firms do, whereas after confiscation there is no significant (...) difference between both types of firm. Furthermore, we find that several factors have a significant influence on the probability of engaging in such a practice. This study can enhance further research on the effectiveness of our measures and on the determinants of LTAV in other contexts and for other types of firms. Moreover, these measures can be added to the other direct and indirect methods commonly employed to measure and detect undeclared work representing a primary means of LTAV. Finally, our study allows inferring conclusions on the relation between corporate social responsibility and tax avoidance, suggesting that socially irresponsible firms, such as LMFs, are more likely to adopt this practice. (shrink)

Building on the Norwegian case, this study examines the long-term implications of board gender quotas on the advancement of gender diversity in managerial leadership. Previous research has indicated that, aside from the board, the quota had limited impact on achieving this objective. However, these studies have narrowly focused on the spill-over effects of the quota, primarily concentrating on the positions of CEO and Chair. The findings of this study reveal contrasting effects of the board gender quota on the gender composition (...) of the board and the executive committee of the board. Consequently, Norwegian companies have increased the representation of women on their boards, as mandated by the law, while simultaneously experiencing a reduction in the presence of female executive directors. Moreover, the strength of both opposing effects has diminished over time. In addition to the board of directors, the quota has not influenced the promotion of gender diversity at other managerial levels. Furthermore, our study suggests that the quota has led to a decrease in the average tenure and level of independence of the boards, although it has not affected the qualifications of board members. (shrink)

After the approval of a code of ethics, the creation of a permanent board‐level ethics committee is the next step in the institutionalization of business ethics. This study explores how the board's structure and demographic characteristics explain the decision to form an ethics committee. The analysis is based on the constituents of the Standard and Poor's Europe 350 index. Consistent with our hypotheses, we find that ethics committees are more likely to be found in firms with a lower presence of (...) executive directors and of directors holding MBA degrees. However, we also observe that boards chaired by executive directors seem to favor the creation of an ethics committee. Additionally, as we had anticipated, firms with stronger agency conflicts seem to be more willing to create committees. The analysis conducted with segmented samples reveals that the model has greater explanatory power when applied to firms from common‐law and French civil‐law countries than when applied to firms from the German–Scandinavian civil‐law area. Finally, our results indicate that a firm's country of origin is a more influential factor in explaining the decision to create an ethics committee than the industry to which it belongs or even the magnitude of its agency conflicts. (shrink)

We investigate whether the geographic concentration of non-EU immigrants in the various Italian provinces affects labour tax avoidance practices adopted by firms located in the same provinces, as well as in the neighbouring provinces, and operating in construction and agriculture industries that mostly employ immigrants in Italy. For this purpose, we develop a LTAV proxy based on the financial accounting information of a sample of 993,606 firm-years, disseminated throughout the 108 Italian provinces, over the period 2008–2016. Our results, based on (...) a Spatial Durbin Model panel regression, reveal a statistically significant positive association between the concentration of non-EU immigrants and LTAV at province level, as well as the presence of spillover effects among neighbouring provinces. Our findings are robust to several additional analyses, including instrumental variable estimations. Our study provides empirical support to previous structuralist or marginalization theories holding that socioeconomically marginalized groups, such as non-EU immigrants, are more likely to be involved in labour exploitation practices, which could underlie our LTAV outcomes. Furthermore, it supports the need for tax authorities to strengthen labour inspections, coordinated at national level, especially in those contexts where non-EU immigrants are mostly employed. On the other hand, a greater social integration, assistance, and recognition of rights of immigrants may help to alleviate their situation of weakness that makes them more vulnerable to LTAV practices. Finally, tackling LTAV, associated with the underemployment of immigrants, may prevent its negative effects for society arising from the reduction of public resources to sustain the social welfare and finance public goods and services. (shrink)