Tax avoidance and CSR performance (an empirical study for Dutch firms)
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2024-07-04
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en
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This study examines the relationship between tax avoidance and corporate social responsibility performance. Prior studies find mixed results. The sample consists of 65 publicly traded Dutch firms. A potential moderating role of the firm’s country is examined. Based on the corporate culture theory and the stakeholder and shareholder theories, it is hypothesized that there exists a negative relationship between tax avoidance and CSR. This study finds that Dutch firms which have higher corporate social responsibility scores, avoid less tax. Overall, this result is consistent with the corporate culture theory. Furthermore, potential moderating effects of age diversity and ethnic diversity are investigated. Using the upper echelons theory, it is predicted that these factors moderate the relationship between tax avoidance and CSR in such a way that the negative relationship is strong for firms with a diverse board. Hower, the results do not provide evidence for a moderating effect of age diversity or ethnic diversity on the relationship between tax avoidance and CSR performance.
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Faculteit der Managementwetenschappen