Relationship between corporate social responsibility and tax avoidance: international evidence

Tao Zeng

Social Responsibility Journal, 2018, vol. 15, issue 2, 244-257

Abstract: Purpose - This paper aims to examine the relationship between corporate social responsibility (CSR) and tax avoidance as well as how CSR and country-level governance interplay in affecting tax avoidance in an international setting. Design/methodology/approach - This paper is an empirical work using listed companies from 35 countries and relying on several proxies for corporate tax avoidance activities including the difference between the statutory tax rate and the annual effective tax rate, the book-tax difference and the residual book-tax difference. Findings - This study finds strong evidence that CSR is positively related to tax avoidance. It also finds that in countries with weak country-level governance, firms with higher CSR scores engage in less tax avoidance, implying that CSR and country-level governance are substitutes. Originality/value - This paper is the first study that examines the relationship between CSR and tax avoidance in an international setting with different legal and institutional environment.

Keywords: Tax avoidance; Corporate social responsibility (CSR); Effective tax rate; Book-tax difference; Country-level governance (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:srjpps:srj-03-2018-0056

DOI: 10.1108/SRJ-03-2018-0056

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