Corporate Social Responsibility, Corporate Tax Avoidance and Earnings Quality- A European Examination
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2019-07-08
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en
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Abstract
This study aims to provide an answer how corporate social responsibility (CSR) affects tax avoidance in Europe. Because existing theory and prior research exhibited inconclusive results and was predominantly conducted using data from American firms, this study examines whether the relationship between CSR and tax avoidance is also maintained for European firms. Using a sample comprising of 5,219 European firm-year observations Europe from 2002 to 2017, multiple analyses are executed. The relationship is tested for the whole sample and by grouping firms domiciled in the UK and firms not domiciled in the UK. Additionally, earnings quality and periodic differences are used to examine the relationship. The results suggest that firms domiciled in the UK do reflect prior results better and differ from the CSR cultures in other European countries. The different CSR components vary in tax avoidance prevention or encouraging. Conclusively, environmental performance seems to be negatively related to tax avoidance for UK firms and positively for non-UK firms, lending credence to the idea that UK firms do not consider environmental performance and tax avoidance complements.
Keywords: Corporate Social Responsibility; Tax Avoidance; Tax Rates; Earnings Management; (European) Corporate Culture; Corporate Governance
Data Availability: Data are available from public sources identified in this thesis.
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Faculteit der Managementwetenschappen