All firms

Family firms (Family firm 3)

Non-family firms

Diff in Means

t-stat.

Mean

Std. Dev.

Mean

Std. Dev.

Mean

Std. Dev.

BTD

−0.009

0.287

0.002

0.251

−0.026

0.316

0.028

3.93**

RBTDs

0.005

0.091

0.007

0.093

0.002

0.087

0.005

2.34*

DPDs (Discretionary Permanent Differences)

0.013

0.321

0.019

0.329

0.004

0.318

0.015

1.94*

Divergence

0.854

0.376

0.876

0.314

0.819

0.398

0.057

6.25**

PTROA

0.015

0.089

0.016

0.093

0.013

0.082

0.003

1.21

NOL_D

0.397

0.412

0.401

0.326

0.391

0.451

0.010

1.03

FOR_D

0.401

0.375

0.414

0.328

0.381

0.431

0.033

3.44**

DAP

−0.040

7.53

0.120

7.01

−0.292

8.14

0.412

2.16*

LEV

0.853

1.853

0.784

0.846

0.961

1.961

−0.177

−4.44**

MTB

1.581

1.547

1.618

1.528

1.523

1.562

0.095

2.49**

EM1

0.089

0.488

0.083

0.476

0.098

0.492

−0.015

−1.29

EM2

0.000

0.424

0.001

0.429

−0.002

0.413

0.003

0.25

ΔPTCFO

0.002

0.134

0.002

0.156

0.002

0.112

0.001

0.16

SIZE

11651

25111

10945

24045

12761

29452

−1815.84

−2.68**

Number of observations

6.929

4235 (61.12%)

2694 (38.88%)

BTDs

The book income less taxable income scaled by lagged total assets;

RBTDs

The portion of book-tax gap not explained by earnings accruals, which was developed by Desai and Dharmapala (2006) ;

DPDs

The discretionary permanent difference is the measure of tax sheltering developed by Frank et al. (2009) ;

Famfirm3

At least one member of the 2nd or later generation serves as an officer, a director or large shareholder (Villalonga & Amit, 2006) .

PTROA

Pre-tax income at t year divided by total assets at year t − 1;

NOL_D

1 if the net operating loss carryforwards for firm i at year t − 1 are greater than 0; 0 otherwise;

FOR_D

1 if foreign income for firm i at year t is not equal to 0; 0 otherwise;

DAP

The performance-adjusted discretionary accruals suggested by Kothari et al. (2005) ;

LEV

Total debt for firm i at year t, divided by total assets at year t;

MTB

Market value of common equity for firm i at year t − 1, divided by book value of common equity for firm i at year t − 1;

EM1

1 if net income in year t, divided by the market value of common equity at year t − 1, is greater than 0 and less than or equal to 0.01 for firm i, and 0 otherwise;

EM2

1 if the change in net income from year t − 1 to year t, divided by the market value of common equity at year t − 2 is greater than 0 and less than or equal to 0.01 for firm i, and 0 otherwise;

ΔPTCFO

Change in pre-tax cash flow from operations for firm i in year t, divided by total assets for firm i at year t − 1; and

SIZE

The natural logarithm of total assets at book value for firm i at year t.