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Does Corporate Social Responsibility Influence Corporate Tax Avoidance of Chinese Listed Companies?

Author

Listed:
  • M.A. Gulzar

    (School of Business, Zhejiang University City College, Hangzhou 310015, China; Waikato Management School, The University of Waikato, Hamilton 3240, New Zealand)

  • Jacob Cherian

    (College of Business, Abu Dhabi University, P.O. Box 59911 Abu Dhabi, UAE)

  • Muhammad Safdar Sial

    (Department of Management Sciences, COMSATS University Islamabad (CUI), Islamabad 44000, Pakistan)

  • Alina Badulescu

    (Department of Economics and Business, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania)

  • Phung Anh Thu

    (Faculty of Finance and Accounting, Nguyen Tat Thanh University, Ho Chi Minh City 700000, Vietnam)

  • Daniel Badulescu

    (Department of Economics and Business, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania)

  • Nguyen Vinh Khuong

    (Faculty of Accounting and Auditing, University of Economics and Law, VNU-HCM, Ho Chi Minh City 700000, Vietnam)

Abstract

The primary objective of this paper is to empirically examine whether corporate social responsibility (CSR) influences corporate tax avoidance (CTA) of Chinese listed companies. The study is based on a sample of 3481 firm-year observations from 2009 to 2015 using CSR ratings from the Rankins (RKS) corporate social responsibility ratings agency in China, and all financial data extracted from the China Stock Market and Accounting Research (CSMAR). The authors foundthat CSR is negatively related to the current and cash effective tax rate (proxies of corporate tax avoidance), suggesting that responsible firms are more involved in tax avoidance as compared to less responsible firms. Their findings are robust against different control variables. Additionally, to the best of the authors’ knowledge, the paper is one of the first to document an empirical association between CSR and corporate tax avoidance of Chinese listed companies.

Suggested Citation

  • M.A. Gulzar & Jacob Cherian & Muhammad Safdar Sial & Alina Badulescu & Phung Anh Thu & Daniel Badulescu & Nguyen Vinh Khuong, 2018. "Does Corporate Social Responsibility Influence Corporate Tax Avoidance of Chinese Listed Companies?," Sustainability, MDPI, vol. 10(12), pages 1-12, December.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:12:p:4549-:d:187206
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    References listed on IDEAS

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    5. Andrea Vacca & Antonio Iazzi & Demetris Vrontis & Monica Fait, 2020. "The Role of Gender Diversity on Tax Aggressiveness and Corporate Social Responsibility: Evidence from Italian Listed Companies," Sustainability, MDPI, vol. 12(5), pages 1-14, March.
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    11. Wei Li & Yuan Lu & Weining Li, 2019. "Does CSR Action Provide Insurance-Like Protection to Tax-Avoiding Firms? Evidence from China," Sustainability, MDPI, vol. 11(19), pages 1-19, September.
    12. Vadim Zasko & Elena Sidorova & Vera Komarova & Diana Boboshko & Olesya Dontsova, 2021. "Digitization of the Customs Revenue Administration as a Factor of the Enhancement of the Budget Efficiency of the Russian Federation," Sustainability, MDPI, vol. 13(19), pages 1-17, September.
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    14. Christofer Adrian & Mukesh Garg & Anh Viet Pham & Soon-Yeow Phang & Cameron Truong, 2023. "Do Natural Disasters Affect Corporate Tax Avoidance? The Case of Drought," Journal of Business Ethics, Springer, vol. 186(1), pages 105-135, August.
    15. Fawad Rauf & Cosmina Lelia Voinea & Hammad Bin Azam Hashmi & Cosmin Fratostiteanu, 2020. "Moderating Effect of Political Embeddedness on the Relationship between Resources Base and Quality of CSR Disclosure in China," Sustainability, MDPI, vol. 12(8), pages 1-19, April.
    16. Panagiotis Karavitis & Pantelis Kazakis & Tianyue Xu, 2021. "Overconfident CEOs, Corporate Social Responsibility & Tax Avoidance: Evidence from China," Working Papers 2021_18, Business School - Economics, University of Glasgow.
    17. Luis Manuel Cerdá Suárez & Jesús Perán López & Belén Cambronero Saiz, 2020. "The Influence of Heuristic judgments in Social Media on Corporate Reputation: A Study in Spanish Leader Companies," Sustainability, MDPI, vol. 12(4), pages 1-17, February.
    18. Tomina Saveanu & Daniel Badulescu & Sorana Saveanu & Maria-Madela Abrudan & Alina Badulescu, 2021. "The Role of Owner-Managers in Shaping CSR Activity of Romanian SMEs," Sustainability, MDPI, vol. 13(20), pages 1-19, October.
    19. 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.
    20. 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.

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