Older and wiser? The impact of CEO age on firm’s tax amnesty participation

Figures & data

Table 1. Sample selection and distribution.

Panel A: Sample Selection		Firm-year
Total firm-year in IDX database (2016-2017)		1,050
Less: Financial institution firms and newly listed firms		(480)
Firm-year available for sample selection		570
Less: firm-year with foreign currencies		(28)
Less: firm-year with suspension/delisted/trading issues		(12)
Less: firm-year with incomplete financial data		(126)
Less: firm-year missing required CEO data		(114)
Firm-year with requisite data		210
Unique Firms		105
Panel B: Distribution of Firm-Year Observations by Year
Year	Firm-year	%
2016	104	49.52
2017	106	50.48
	210	100%
Panel C: Distribution of Firm Observations, by Industry		105
Industry	Firm-year	%
Business services	48	22.86
Manufacturing	36	17.14
Construction	22	10.48
Retail	18	8.57
Mining	16	7.62
Agriculture	10	4.76
Computers	8	3.81
Remaining industries (12 industries)	52	24.76
	210	100%

Table 2. Summary statistics.

	N	Mean	Median	Std. Dev	Min	P25	P75	Max
TAXAMNESTY	210	0.162	0.000	0.369	0	0.000	0.000	1
CEOAGE	210	55.36	54.00	8.97	31	50.00	61.00	87
SIZE	210	24.26	24.23	1.59	19.99	23.20	25.56	28.61
ROA	210	0.079	0.062	0.071	0	0.032	0.099	0.40
R&D EXP	210	0.001	0.000	0.003	0	0.000	0.000	0.04
BOARDS	210	0.263	0.250	0.070	0.141	0.213	0.310	0.500
FSCORE	210	−0.463	−0.593	0.382	−0.882	−0.710	−0.323	1.453
READABILITY	210	12.41	12.22	1.08	10.42	11.73	13.06	19.65
CETR	210	0.315	0.266	0.187	0	0.213	0.390	1
POPULARCEO	210	0.370	0.385	0.229	0	0.202	0.508	0.863

This table reports the descriptive statistics for the sample of 210 firm-year observations for the period 2016–2017. The Appendix provides a detailed description of the variables.

Table 3. Correlation matrix.

	1	2	3	4	5	6	7	8	9	10
1.TAXAMNESTY		−0.15*	−0.02	0.04	−0.12	0.04	−0.01	−0.02	0.03	−0.07
2.CEOAGE	−0.13*		−0.02	−0.10	−0.13	−0.11	−0.05	−0.02	−0.01	−0.13
3.SIZE	−0.02	0.01		0.16*	0.04	−0.15*	0.20*	−0.10	0.02	0.16*
4.ROA	−0.02	−0.11	0.13		0.07	0.01	−0.05	0.05	−0.25*	0.01
5.R&D EXP	−0.11	−0.01	−0.01	0.28*		−0.08	−0.10	−0.04	0.06	0.14*
6.BOARDS	0.04	−0.12	−0.16*	0.06	0.01		0.01	0.09	−0.02	−0.14*
7.FSCORE	−0.06	−0.07	0.18*	−0.04	−0.11	0.01		−0.16*	0.11	0.04
8.READABILITY	−0.01	−0.03	−0.09	0.13	−0.12	0.09	−0.09		0.04	−0.13
9.CETR	−0.01	0.11	0.01	−0.23*	−0.06	−0.01	0.04	0.07		−0.09
10.POPULARCEO	−0.08	−0.18*	0.15*	0.02	0.02	−0.14*	0.05	−0.09	−0.05

* Indicates a statistical significance at the 5-percent level.

This table reports the correlation matrix for the sample of 210 firm-year observations for the period of 2016–2017. The Spearman correlation is presented above the diagonal, while Pearson correlation is presented below the diagonal. The Appendix provides a detailed description of the variables.

Table 4. CEO age and tax amnesty.

	TAXAMNESTY
	1	2
CEOAGE	−0.044** (0.022)	−0.058** (0.023)
SIZE		0.042 (0.135)
ROA		−0.207 (3.192)
R&D EXP		−1,737 (1.160)
BOARDS		0.244 (2.758)
FSCORE		−0.775 (0.611)
FOG		−0.087 (0.208)
CETR		0.363 (1.084)
POPULARCEO		−1.219 (0.921)
Constant	0.770 (1.199)	1.658 (4.638)
Chi-Square	4.20	18.78
Pseudo R-square	0.0226	0.1010
N	210	210

This table shows the logit regression results for the impact of CEO Age on the tax amnesty program participation. The results presented are estimated using the test and all control variables. Column 1 shows the result when we use the Age of CEO in year t. Column 2 presents the result when we use the moving average of CEO Age from t-2 to t. We winsorize continuous variables at the 1 and 99 percent levels. We present the standard errors in parentheses. We provide definitions of the variables in the Appendix. *, **, and ***, indicate a statistical significance at the 10, 5, and 1 percent levels, respectively.

Table 5. Propensity score matching regression – CEO age.

Panel A: Descriptive statistics for the matched sample
	Treatment Firms	Control Firms	t-test
Dependent Variables
TAXAMNESTY	0.056	0.296	3.92***
Control Variables
SIZE	24.33	24.24	0.35
ROA	0.079	0.072	0.62
R&D EXP	0.001	0.001	−0.42
BOARDS	0.260	0.268	−0.66
FSCORE	−0.502	−0.553	1.07
FOG	12.33	12.32	0.05
CETR	0.309	0.314	−0.13
POPULARCEO	0.364	0.362	0.06
Panel B: PSM Regression Analysis
	TAXAMNESTY
CEOAGE	−0.104*** (0.031)
SIZE	0.010 (0.169)
ROA	3.455 (3.848)
R&D EXP	−2,479 (2, 111)
BOARDS	−4.091 (3.793)
FSCORE	0.167 (0.964)
FOG	0.147 (0.267)
CETR	0.137 (1.461)
POPULARCEO	−1.527 (1.181)
Constant	3.626 (5.800)
Chi-square	23.53
Pseudo R-square	0.1780
N	142

Table 6. CEO age and tax amnesty – average of CEO age.

	TAXAMNESTY
AVGCEOAGE	−0.036 (0.025)
SIZE	0.037 (0.133)
ROA	−0.234 (3.192)
R&D EXP	−1.621 (1, 100)
BOARDS	0.456 (2.744)
FSCORE	−0.777 (0.611)
FOG	−0.105 (0.202)
CETR	0.254 (1.061)
POPULARCEO	−1.092 (0.925)
Constant	0.787 (4.518)
Chi-Square	14.48
Pseudo R-square	0.0778
N	210

This table shows the logit regression results for the impact of CEO Age on the tax amnesty program participation. The results presented are estimated using the test and all control variables. We show the result when we use the moving average of CEO Age from t-2 to t. We winsorize continuous variables at the 1 and 99 percent levels. We present the standard errors in parentheses. We provide definitions of the variables in the Appendix. *, **, and ***, indicate a statistical significance at the 10, 5, and 1 percent levels, respectively.

Table 7. Additional analysis.

	TAXAMNESTY
	2016	2017
CEOAGE	−0.019 (0.021)	−0.045* (0.027)
SIZE	−0.129 (0.125)	−0.051 (0.151)
ROA	−2.347 (3.401)	−0.535 (3.705)
R&D EXP	−129.9 (149.0)	−135.6 (150.7)
BOARDS	−2.225 (2.685)	0.236 (3.290)
FSCORE	0.353 (0.478)	−0.669 (0.708)
FOG	0.161 (0.174)	−0.264 (0.239)
CETR	1.380 (0.966)	−1.242 (1.378)
POPULARCEO	−0.381 (0.829)	0.012 (0.997)
Constant	1.250 (4.095)	4.906 (5.228)
Chi-Square	9.12	7.62
Pseudo R-square	0.0474	0.0525
N	210	210

This table shows the logit regression results for the impact of CEO Age on the tax amnesty program participation. Specifically, we show the relationship between CEO Age and participation of tax amnesty program in year 2016 and 2017. We winsorize continuous variables at the 1 and 99 percent levels. We present the standard errors in parentheses. We provide definitions of the variables in the Appendix. *, **, and ***, indicate a statistical significance at the 10, 5, and 1 percent levels, respectively.

Data availability statement

We obtained the data from Indonesia Stock Exchange website, firm’s annual report and relevant public information. The authors performed further calculations. The data and necessary code are available upon request (in a good faith and fair use).