 Exploring the Relationship Between Environmental, Social, and Governance and Tax Avoidance StrategiesHyun-Ah Lee SAGE Open, 2024, vol. 14, issue 4, 21582440241298089 Abstract: This study investigates how each environmental, social, and governance (ESG) dimension relates to tax avoidance in well- and poorly governed firms. The analysis uses data from 2016 to 2020 on A-share companies listed on the Shanghai and Shenzhen stock exchanges and three panel methodologies: pooled ordinary least squares, random effects, and fixed effects models. The results show that not all ESG dimensions are equally associated with tax avoidance, and the relationship between ESG and tax avoidance differs between well- and poorly governed firms. For well-governed firms, the social and governance dimensions positively correlate with tax avoidance, whereas the environmental dimension does not. For poorly governed firms, none of the three dimensions correlate with tax avoidance. These findings suggest that ESG and tax avoidance are more compatible than conflicting. Moreover, they underscore the importance of good corporate governance in enabling tax avoidance as an ESG-compatible strategy. This study addresses the debatable relationship between ESG and tax avoidance, which has significant implications for stakeholders, including managers, investors, and policymakers. Keywords: ESG; tax; governance; sustainability; firm value (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:14:y:2024:i:4:p:21582440241298089 DOI: 10.1177/21582440241298089 Access Statistics for this article More articles in SAGE Open |
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