Navigating cultural complexity: The influence of culture on the relationship between corporate social responsibility and tax avoidance
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2024-07-09
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en
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Tax avoidance is an increasingly important problem as it reduces the financial resources available to governments that are essential for funding public services and programs, ultimately harming societal welfare. This thesis investigates the relationship between corporate social responsibility (CSR) performance and tax avoidance and how national culture moderates this relationship. National culture is operationalized using the two dimensions of the Inglehart-Welzel cultural map. The sample consists of 45.712 firm-year observations from 61 countries over the period 2014-2022 and uses publicly listed companies. The results show that CSR performance is negatively related to tax avoidance, although differences are shown in the effects of the disaggregated measures of the environmental, governance, and social dimension. Furthermore, it is shown that national culture significantly moderates the relationship between CSR and tax avoidance, with the traditional/secular-rational dimension diminishing or even reversing the negative relationship, whereas the survival/self-expression dimension strengthens the negative relationship. This thesis is relevant for policymakers combating tax avoidance by providing a more holistic understanding of the complex dynamics underlying tax avoidance.
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Faculteit der Managementwetenschappen