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This study aims to investigate the relationship between carbon risk and tax avoidance practices among American firms.

The research examines 854 American firms over the period from 2015 to 2021. A two-stage least squares regression technique with instrumental variables is used to address potential endogeneity concerns.

The study shows that an increase in carbon risk is associated with higher tax avoidance, particularly through Scope 1 and Scope 2 emissions. These findings are robust across various metrics used to measure carbon risk and align with the insights derived from agency theory.

Although focusing on American firms provides a consistent regulatory context, it may limit the generalizability of findings to other contexts. The study’s implications suggest that policymakers and managers should consider the interplay between environmental and tax policies in their decision-making processes.

This study contributes to the literature by extending the understanding of determinants of corporate tax avoidance by introducing carbon risk as a significant factor. The results provide valuable insights for stakeholders into the evolving dynamics of corporate environmental and fiscal responsibilities.

This study aims to investigate the effect of overconfident chief executive officers (CEOs) on corporate tax avoidance and whether this relationship is affected by institutional and family ownership.

Using a sample of French-listed firms from 2009 to 2021, the authors find that firms managed by overconfident CEOs engage in more tax avoidance practice.

The authors further find that institutions and families are likely to discourage tax avoidance practices, paying close attention to their long-term horizons and reputational concerns. Overall, the authors' findings shed light on the monitoring role of institutional and family shareholders in restraining the effect of CEO behavioral bias on companies' tax avoidance.

To the authors' knowledge, no study has investigated the impact of managerial overconfidence on the tax behavior of French firms. The authors also extend the growing literature regarding managerial effects by providing new evidence that French firms held by concentrated institutional and family ownership curtail CEO overconfidence behavior toward corporate tax avoidance practices.