CSR decoupling and tax avoidance: the moderating role of national culture
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2025-07-03
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en
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This paper investigates the association between CSR decoupling and tax avoidance, as well as the moderating effect of national culture on this association. According to legitimacy, stakeholder, and agency theory, there should be a positive relation between CSR decoupling and tax avoidance. Based on a unique panel data set consisting of 4,367 publicly traded firms in 73 countries, the findings provide evidence supporting the notion that firms with higher levels of CSR decoupling engage in more tax avoidance. Using Hofstede’s (2001) cultural dimensions, the results suggest power distance, uncertainty avoidance and stakeholder orientation have a significant moderating effect on the association. For regulators, lowering CSR decoupling could potentially reduce tax avoidance, indicating that improving the quality and transparency of CSR reports could decrease the use of tax avoidance. Furthermore, it alerts capital providers to indicators of a firm’s simultaneous engagement in CSR decoupling and tax avoidance, which may be considered unethical management practices. In particular, the findings highlight the relevance of the association in certain cultural contexts.
Keywords: tax avoidance, CSR decoupling, culture, corporate social responsibility (CSR) reporting, legitimacy theory, stakeholder theory, agency theory
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Faculteit der Managementwetenschappen