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The present paper examines whether tax avoidance practices affect productivity in small and medium-sized enterprises (SMEs). This study also analyses whether this association is moderated by firm size, firm financial constraints, management control of cash flows, or information risk.

This study used a sample of Spanish SMEs for the period 2006–2020. Tax avoidance was measured as the difference between the statutory tax rate and the effective tax rate, and three proxies for productivity were used: overall productivity, capital productivity and labour productivity. Firm fixed effects regressions, propensity score matching and change regressions were used to address the potential sample selection bias and endogeneity between tax avoidance and productivity.

The results of the empirical analysis suggest that tax avoidance increases productivity in SMEs. This beneficial effect of tax avoidance was found to be higher in small firms than in medium-sized firms, but smaller in firms that faced financial constraints. Furthermore, the findings showed that the tax avoidance effect on productivity was stronger in firms where managers had less control over the cash flow –i.e. dividend-paying firms–, and weaker in firms with lower quality of financial information – i.e. firms with qualified audit reports.

This study contributes to the research on the economic consequences of tax avoidance by examining its impact on firm-level productivity in SMEs. From additional analyses, the findings of the study suggest that the positive effect of tax avoidance on firm productivity depends on firm size, the financial slack of the firm, and the costs of agency conflicts and information problems associated with tax avoidance.

The results of this study have implications for SMEs, suggesting that cash flows obtained through tax avoidance, if properly used, may increase firm productivity. In planning their tax avoidance practices, SME managers could take advantage of specific tax incentives designed for SMEs, which is particularly relevant given the low-productivity levels of these firms. The findings also highlight the importance of maintaining high-quality information and implementing mechanisms to mitigate the agency risks associated with tax avoidance to enhance the productivity of SMEs.

This study provides important insights to policymakers on SME tax policy, supporting the special tax rules for SMEs – in force in many OECD and EU countries – which aim to create an environment conducive to SME growth. The findings of the study also have macroeconomic implications, given the importance of firm productivity as a determinant of economic growth and the relevance of SMEs in most national economies.

This study provides novel empirical evidence on the effects of tax avoidance on firm-level productivity in SMEs. Despite the prevalence of SMEs as the predominant type of organization in most countries, no prior research has comprehensively examined this issue for this type of firm. This research question was addressed by considering proxies for overall, capital, and labour productivity and by examining how SME characteristics affect this relationship.

This study aims to examine the effects on Tobin's Q of various dimensions of the Spanish ownership structure likely to represent conflicting interests: ownership concentration, insider ownership and bank ownership.

The sample of firms is drawn from the population of Spanish non‐financial firms listed on the Madrid Stock Exchange during 1999‐2002. This paper uses data that have both cross‐sectional and time variation, which allows us to control for unobservable firm heterogeneity and obtain consistent estimates of the coefficients.

Contrary to most previous evidence, the results show that the main ownership structure mechanism that affects firm value is ownership concentration. The findings suggest that ownership concentration appears to influence firm value favourably, but at high levels a detrimental effect causes market valuation to be negatively affected by high levels of large shareholder ownership. These findings, which are different from the linear or non‐significant relationships found in other countries, can be explained by the differences in corporate governance systems.

The evidence indicates that controlling owners tend to misuse their dominant position at high levels of concentration and to make decisions that destroy market value. The findings also highlight the necessity of alternative corporate governance mechanisms that lead Spanish firms to lower their agency costs and to maximise their market value when blockholders' and minority shareholders' interests do not converge.

The study builds on prior research in several ways. First, the paper offers new insights into the relationship between corporate governance and economic performance by using data from Spanish listed firms. Second, the study focuses on three dimensions: ownership concentration, insider ownership, and bank ownership, which allow one to get a more accurate picture of the ownership structure‐firm value relation. Finally, the study controls for unobservable firm effects by applying the econometrics of panel data.

Corporate governance empirical studies have primarily focused on the effects of corporate characteristics on market value, discretionary accruals, voluntary disclosure and firm performance. Nevertheless, corporate governance characteristics and the legal system of investor protection may also influence the role of statutory auditors and the demand for audit quality. The aim of this study is to investigate the corporate governance role of external audits in the Spanish capital market context.

This article measures this question by considering the conflicts of interests between managers and shareholders analysed in the agency theory. This article uses a logistic regression using a matched pair design, developed with the dependent variable indicating whether the firm receives a qualified opinion, and the independent variables representing ownership concentration, board ownership, board size and family members on the board. Empirical support for this study is gathered from a sample of Spanish listed firms during the period 1999‐2002.

The results support that higher insider ownership provides better corporate governance structure leading to higher quality of financial reporting and, therefore, less likelihood of receiving qualified audit reports. On the other hand, the presence of family members on the board increases the possibility of obtaining a qualified report.

This study focuses explicitly on the end result of the audit decision process: the presence or absence of a qualification, which is the central concern of the financial statement user.

The purpose of this paper is to describe internal corporate governance mechanisms in family firms as well as conflicts that may arise among shareholders and family members in the absence of specific corporate governance mechanisms.

After presenting theoretical concepts, the authors study the case of Spanish family firm El Corte Inglés to understand some of the corporate governance difficulties the company has experienced over the past few years.

This case illustrates how corporate governance problems can arise because the right mechanisms have not been used, leading to conflicts among family members, valuation problems and power struggles.

There is a need for family firms to employ suitable corporate governance mechanisms as governance complexity increases.

This study aims to contribute to the understanding of corporate governance problems among family members and their possible solutions.