Corporate social responsibility, institutional environments, and tax avoidance : evidence from a subnational comparison in China
Document Type
Journal article
Source Publication
International Journal of Accounting
Publication Date
12-1-2017
Volume
52
Issue
4
First Page
303
Last Page
318
Publisher
Elsevier Ltd
Keywords
Business ethics and social responsibility, Institutions, Tax avoidance, Transition economies
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.
DOI
10.1016/j.intacc.2017.11.002
Print ISSN
00207063
E-ISSN
22133933
Funding Information
Financial support from Lingnan University (Funding Ref. DR13A1). {DR13A1}
Publisher Statement
Copyright © 2017 University of Illinois. Access to external full text or publisher's version may require subscription.
Additional Information
This paper won the 36th International Business Research Conference Best Paper Award.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Lin, K. Z., Cheng, S., & Zhang, F. (2017). Corporate social responsibility, institutional environments, and tax avoidance: Evidence from a subnational comparison in China. International Journal of Accounting, 52(4), 303-318. doi: 10.1016/j.intacc.2017.11.002