Business Tax reform and CSR engagement: Evidence from China

Dongmin Kong, Mengxu Xiong and Ni Qin

International Review of Financial Analysis, 2022, vol. 82, issue C

Abstract: This study investigates the impacts of tax incentives on firms' CSR engagement. Using the staggered Business Tax reform in China as exogenous shocks, our difference-in-differences estimation shows that tax incentives facilitate firms' CSR disclosure, and a plausible mechanism is the released financial burden. The result remains valid under a battery of robustness checks and is more pronounced for state-owned firms, firms with tighter political connections, firms with transparent information and firms locate in areas with higher degree of social trust. The study provides clear policy implications by elaborating on the favorable impacts of tax incentives on firms' CSR performance.

Keywords: Business tax reform; CSR; Difference-in-differences; Financial constraint; China (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:82:y:2022:i:c:s1057521922001417

DOI: 10.1016/j.irfa.2022.102178

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