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The mediating role of corporate social responsibility on the relationship between governance and tax avoidance: UK common law versus French civil law

Author

Listed:
  • Bassem Salhi
  • Rakia Riguen
  • Maali Kachouri
  • Anis Jarboui

Abstract

Purpose - The purpose of this paper is to investigate the direct and indirect links between corporate governance and tax avoidance using corporate social responsibility (CSR). Design/methodology/approach - This study is based on a sample consisting of 300 UK and 200 French firms over the period 2005-2017. This study is motivated by structural equations and system models that specify both a direct link and an indirect link between corporate governance and tax avoidance. Findings - The results show that CSR fully mediates the relationship between corporate governance and tax avoidance in UK firms. In addition, in French firms, CSR partially mediates the relation between corporate governance and tax avoidance. Practical implications - The findings may be of interest to the academic researchers, practitioners and regulators who are interested in discovering corporate governance score, tax avoidance and CSR. Regulators must evaluate their actual corporate governance mechanisms and their country’s legal system before mandating additional governance mechanisms for firms in their country. Social implications - This study proved empirically that firms with a higher level of social responsibility are better positioned to obtain more transparency through reducing tax avoidance. Originality/value - This paper extends the existing literature by examining the mediation effect of CSR on the relationship between tax avoidance and corporate governance.

Suggested Citation

  • Bassem Salhi & Rakia Riguen & Maali Kachouri & Anis Jarboui, 2019. "The mediating role of corporate social responsibility on the relationship between governance and tax avoidance: UK common law versus French civil law," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 16(8), pages 1149-1168, August.
    • Handle: RePEc:eme:srjpps:srj-04-2019-0125
    DOI: 10.1108/SRJ-04-2019-0125
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    Citations

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    Cited by:

    1. Francesco Scarpa & Silvana Signori, 2023. "Understanding corporate tax responsibility: a systematic literature review," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 14(7), pages 179-201, June.
    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. Antonio Faúndez-Ugalde & Patricia Toledo-Zúñiga & Pedro Castro-Rodríguez, 2022. "Tax Sustainability: Tax Transparency in Latin America and the Chilean Case," Sustainability, MDPI, vol. 14(4), pages 1-17, February.
    4. Osman Issah & Lúcia Lima Rodrigues, 2021. "Corporate Social Responsibility and Corporate Tax Aggressiveness: A Scientometric Analysis of the Existing Literature to Map the Future," Sustainability, MDPI, vol. 13(11), pages 1-23, June.
    5. Fawad Rauf & Wanqiu Wang & Cosmina L. Voinea, 2024. "Interaction of Corporate Social Responsibility Reporting at the Crossroads of Green Innovation Performance and Firm Performance: The Moderating Role of the Enterprise Life Stage," Sustainability, MDPI, vol. 16(5), pages 1-18, February.

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