Exploring corporate social irresponsibility: The influence of institutions on tax optimization
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2025-05-19
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en
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This study investigates the institutional antecedents of corporate social irresponsibility (CSiR) in the area of taxes. While corporate social responsibility (CSR) has been widely explored, both through agency and institutional lenses, the CSiR literature remains underdeveloped and focuses on agency-based explanations. A panel data analysis was conducted using data from firms that ever had at least one irresponsible incident and were headquartered in the European Union (EU) during the period 2015-2020 to examine whether corporate tax rates influence firms’ engagement in tax optimization, and whether this relationship is moderated by CSR activities.
The findings show no evidence that higher corporate tax rates are associated with more tax optimization. In fact, the findings provide some evidence, although not robust across all models, for a negative relationship between corporate tax rates and tax optimization. Moreover, limited and non-robust support is found for CSR as a positive moderating factor. These findings imply that potential reputational costs may outweigh financial benefits, and that firms may use CSR activities to mitigate the reputational risks associated with tax optimization, supporting the risk-management perspective. This study contributes to the CSiR literature by investigating the institutional antecedents of CSiR in a previously unexplored area and by exploring tax optimization as a CSiR issue.
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Faculteit der Managementwetenschappen