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Moderated mediation effects of corporate social responsibility performance on tax avoidance: evidence from China

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  • Chih-Wen Mao
  • Wen-Chieh Wu

Abstract

Using data of publicly listed Chinese companies practicing corporate social responsibility (CSR) activities between 2009 and 2016, this study empirically examines whether CSR performance has a conditional indirect effect (or moderated mediation effect) on the level of corporate tax avoidance. We find that corporate profitability serves as a full mediator in the association between CSR performance and corporate tax avoidance. CSR performance reduces corporate profitability, and corporate profitability in turn increases the level of corporate tax avoidance. In other words, CSR performance first reduces corporate profitability, and therefore results in lower corporate tax avoidance. Moreover, CSR performance does not significantly moderate the effect of corporate profitability on corporate tax avoidance. Therefore, our results suggest that CSR performance has an indirect, but not a conditional, effect on the level of corporate tax avoidance.

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  • Chih-Wen Mao & Wen-Chieh Wu, 2019. "Moderated mediation effects of corporate social responsibility performance on tax avoidance: evidence from China," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 26(1-2), pages 90-107, January.
    • Handle: RePEc:taf:raaexx:v:26:y:2019:i:1-2:p:90-107
    DOI: 10.1080/16081625.2019.1546157
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    Cited by:

    1. Lurdes Araújo & Sérgio Ravara Cruz & Luís Lima Santos & Lucília Cardoso, 2024. "Mapping Corporate Tax Planning and Corporate Social Responsibility: A Hybrid Method of Category Analysis," JRFM, MDPI, vol. 17(8), pages 1-22, August.
    2. 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.
    3. 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.
    4. Bohyun Yoon & Jeong-Hwan Lee & Jin-Hyung Cho, 2021. "The Effect of ESG Performance on Tax Avoidance—Evidence from Korea," Sustainability, MDPI, vol. 13(12), pages 1-16, June.
    5. Patrick Velte, 2023. "Sustainable institutional investors, corporate sustainability performance, and corporate tax avoidance: Empirical evidence for the European capital market," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2406-2418, September.
    6. Gavious, Ilanit & Livne, Gilad & Chen, Ester, 2022. "Does tax avoidance increase or decrease when tax enforcement is stronger? Evidence using CSR heterogeneity perspective," International Review of Financial Analysis, Elsevier, vol. 84(C).
    7. Itotenaan Henry Ogiri, PhD & Hillary Ukachukwu Nosiri, 2022. "CSR Practice and Tax Compliance: Is there a nexus between the two?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(9), pages 440-447, September.

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