Corporate corruption risk, tax avoidance and the moderating role of gender diversity: evidence from the French CAC 40 listed firms

Purpose Tax avoidance has been extensively examined in the literature, yet the role of corporate corruption risk as a key determinant remains overlooked. This study investigates the impact of corporate corruption risk on tax avoidance while highlighting the moderating role of board gender diversity. Design/methodology/approach A dataset comprising 455 annual observations from French companies listed on the CAC 40 index from 2010 to 2022 was used to test the model using panel data and multiple regressions. This paper considered the feasible generalized least squares (FGLS) estimation for linear panel data models. A multiple regression model is used to analyze the moderating effect of gender diversity on the association between corporate corruption risk and tax avoidance. For robustness analyses, we included the alternative CASH_ETR as a measure of the dependent variable. Findings The findings indicate that corporate corruption risk positively affects tax avoidance practices. Conversely, gender diversity on boards negatively impacts tax avoidance, with the presence of women moderating the relationship between corruption risk and tax avoidance, transforming a positive correlation into a negative one for companies with higher gender diversity. Practical implications This study highlights the critical role of gender diversity in enhancing corporate governance and mitigating unethical tax avoidance practices. It offers actionable insights for executives to improve corporate responsibility and public trust, while also guiding policymakers in promoting board diversity through targeted initiatives. By fostering inclusivity, boards can effectively reduce corruption risks and align tax practices with ethical and regulatory standards, contributing to more transparent governance across industries. Originality/value To the best of our knowledge, this study is the first to investigate the combined effect of corporate corruption risk and board gender diversity on tax avoidance within CAC 40 firms. While prior literature has predominantly focused on CSR or national-level corruption, corporate corruption risk has remained an often-overlooked yet critical determinant of tax behavior. The internal climate of corruption can significantly influence firms’ tax avoidance strategies, turning them into opportunistic behaviors that undermine both financial transparency and corporate governance. By examining this relationship through agency and institutional theories, and in light of France’s strengthened anti-corruption and gender diversity regulations (notably the Sapin II and Copé-Zimmermann laws), our study highlights the key role of gender-diverse boards in mitigating aggressive tax practices linked to corruption risk. This research contributes to a deeper understanding of how governance mechanisms can shape corporate tax behavior, addressing an important gap in the existing literature.