Corporate Social Responsibility, Institutional Environments, and Tax Avoidance: Evidence from a Subnational Comparison in China

Kenny Z. Lin, Suwina Cheng and Fang Zhang

The International Journal of Accounting, 2017, vol. 52, issue 4, 303-318

Abstract: We examine the association between mandatory corporate social responsibility (CSR) disclosure and economic contribution (tax payments) in China, where we expect this association to be affected by a region's institutional attributes. Exploiting a dataset that shows cross-regional variations in institutions, we find that in regions with lower institutional quality, firms claiming to be socially responsible actually avoid taxes, whereas CSR disclosure in other regions is more aligned with the social responsibility aspect of tax compliance. Our study contributes to the literature by demonstrating that in the absence of proper institutions, CSR disclosure is likely to remain a form of window dressing.

Keywords: Business ethics and social responsibility; Institutions; Tax avoidance; Transition economies (search for similar items in EconPapers)
JEL-codes: H26 M41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:52:y:2017:i:4:p:303-318

DOI: 10.1016/j.intacc.2017.11.002

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