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Relationship between corporate social responsibility and tax avoidance: international evidence

Author

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  • Tao Zeng

Abstract

Purpose - This paper aims to examine the relationship between corporate social responsibility (CSR) and tax avoidance as well as how CSR and country-level governance interplay in affecting tax avoidance in an international setting. Design/methodology/approach - This paper is an empirical work using listed companies from 35 countries and relying on several proxies for corporate tax avoidance activities including the difference between the statutory tax rate and the annual effective tax rate, the book-tax difference and the residual book-tax difference. Findings - This study finds strong evidence that CSR is positively related to tax avoidance. It also finds that in countries with weak country-level governance, firms with higher CSR scores engage in less tax avoidance, implying that CSR and country-level governance are substitutes. Originality/value - This paper is the first study that examines the relationship between CSR and tax avoidance in an international setting with different legal and institutional environment.

Suggested Citation

  • Tao Zeng, 2018. "Relationship between corporate social responsibility and tax avoidance: international evidence," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 15(2), pages 244-257, November.
    • Handle: RePEc:eme:srjpps:srj-03-2018-0056
    DOI: 10.1108/SRJ-03-2018-0056
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    Citations

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    Cited by:

    1. Liu, Wei & Zhao, Zhihui & Wen, Zhao & Cheng, Shixiong, 2022. "Environmental regulation and OFDI: Evidence from Chinese listed firms," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 191-208.
    2. Tânia Menezes Montenegro, 2021. "Tax Evasion, Corporate Social Responsibility and National Governance: A Country-Level Study," Sustainability, MDPI, vol. 13(20), pages 1-19, October.
    3. Nadia Elouaer & Rida Waheed & Suleman Sarwar & Ghazala Aziz, 2022. "Does Gender Diversity and Experience Moderate the Impact of Tax Aggressiveness on Corporate Social Responsibility: A Study of UAE Listed Companies," Sustainability, MDPI, vol. 14(21), pages 1-13, November.
    4. Okuyama, Akihiro & TSUGAWA, Shuichi & Matsunaga, Chiaki & Managi, Shunsuke, 2021. "Can tax payments complement high environmental, social, and governance reputational risk?," MPRA Paper 110464, University Library of Munich, Germany.

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