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Does corporate social responsibility affect tax avoidance: Evidence from family firms

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  • Eva López‐González
  • Jennifer Martínez‐Ferrero
  • Emma García‐Meca

Abstract

The purpose of this paper is to shed light on the effect of corporate social responsibility performance on tax avoidance. It also examines whether family ownership affects tax avoidance practices by socially responsible performance. Based on an international sample of 6,442 firm‐year observations from 2006 to 2014, we use several panel‐data regression models. We find that social and environmental performance is negatively related with tax avoidance so that firms with a greater socially responsible performance show a lower tax‐saving practices. However, we find that this negative relation is lower in family‐owned firms, what suggests that despite the fact that family firms show a greater socially responsible behavior aimed to preserve their socioemotional endowments, family ownership is positively associated with tax avoidance practices.

Suggested Citation

  • Eva López‐González & Jennifer Martínez‐Ferrero & Emma García‐Meca, 2019. "Does corporate social responsibility affect tax avoidance: Evidence from family firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(4), pages 819-831, July.
    • Handle: RePEc:wly:corsem:v:26:y:2019:i:4:p:819-831
    DOI: 10.1002/csr.1723
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    5. 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.
    6. Chaiyot Sumritsakun, 2022. "The Relationship between Sustainable Management and Earning Management of Thai Listed Firms in SET100 Index ," GATR Journals jfbr196, Global Academy of Training and Research (GATR) Enterprise.
    7. Liu, Feng & Huang, Wanying & Zhang, Jing & Fang, Mingjie, 2024. "Corporate social responsibility in family business: Using machine learning to uncover who is doing good," Technology in Society, Elsevier, vol. 76(C).
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