How Corporate Governance moderates the Relationship Between CSR and Tax Avoidance
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2024-07-08
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en
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Abstract
This study examines the relationship between CSR disclosure and corporate tax avoidance. Investigating this relationship is relevant because tax avoidance comes with risks. Further investigation into what moderates this relationship is essential because the literature presents contradictory evidence on the direction of the relationship. Six moderating variables (board diversity, external CSR audit, national governance quality, and reputational industry) are tested in relation to CSR disclosure and tax avoidance. This study examines whether the relationship between CSR disclosure and tax avoidance is weakened or strengthened by each moderator and the interplay between them, using a multiple regression analysis in a dataset of 14,152 firm-year observations. The main analysis revealed a positive relationship between CSR disclosure and tax avoidance but did not reveal any significant moderator relationships. The robustness checks indicate that the relationship between CSR and tax avoidance might be more negative for the single moderator effect of board diversity, national governance, and reputational industry. Conversely, the relationship might be more positive for the single moderator effect of an external CSR audit. Lastly, the robustness checks indicate how multiple moderators might influence the relationship between CSR disclosure and tax avoidance. Since this study contains limitations, results should be interpreted with caution.
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Faculteit der Managementwetenschappen