Corporate social responsibility, institutional environments, and tax avoidance : evidence from a subnational comparison in China

Kenny Z. LIN, Suwina CHENG, Fang ZHANG

Research output: Journal PublicationsJournal Article (refereed)

4 Citations (Scopus)

Abstract

We examine the association between mandatory corporate social responsibility (CSR) disclosure and economic contribution (tax payments) in China, where we expect this association to be affected by a region's institutional attributes. Exploiting a dataset that shows cross-regional variations in institutions, we find that in regions with lower institutional quality, firms claiming to be socially responsible actually avoid taxes, whereas CSR disclosure in other regions is more aligned with the social responsibility aspect of tax compliance. Our study contributes to the literature by demonstrating that in the absence of proper institutions, CSR disclosure is likely to remain a form of window dressing.
Original languageEnglish
Pages (from-to)303-318
Number of pages16
JournalInternational Journal of Accounting
Volume52
Issue number4
Early online date15 Nov 2017
DOIs
Publication statusPublished - Dec 2017

Fingerprint

Tax avoidance
Corporate Social Responsibility
China
Institutional environment
Disclosure
Tax
Window dressing
Social responsibility
Payment
Institutional quality
Economics
Tax compliance
Regional variation

Bibliographical note

This paper won the 36th International Business Research Conference Best Paper Award. Kenny Lin acknowledges financial support from Lingnan University (Funding Ref. DR13A1).

Keywords

  • Business ethics and social responsibility
  • Institutions
  • Tax avoidance
  • Transition economies

Cite this

@article{d380de45dde64bffb1080a0a412b7985,
title = "Corporate social responsibility, institutional environments, and tax avoidance : evidence from a subnational comparison in China",
abstract = "We examine the association between mandatory corporate social responsibility (CSR) disclosure and economic contribution (tax payments) in China, where we expect this association to be affected by a region's institutional attributes. Exploiting a dataset that shows cross-regional variations in institutions, we find that in regions with lower institutional quality, firms claiming to be socially responsible actually avoid taxes, whereas CSR disclosure in other regions is more aligned with the social responsibility aspect of tax compliance. Our study contributes to the literature by demonstrating that in the absence of proper institutions, CSR disclosure is likely to remain a form of window dressing.",
keywords = "Business ethics and social responsibility, Institutions, Tax avoidance, Transition economies",
author = "LIN, {Kenny Z.} and Suwina CHENG and Fang ZHANG",
note = "This paper won the 36th International Business Research Conference Best Paper Award. Kenny Lin acknowledges financial support from Lingnan University (Funding Ref. DR13A1).",
year = "2017",
month = "12",
doi = "10.1016/j.intacc.2017.11.002",
language = "English",
volume = "52",
pages = "303--318",
journal = "International Journal of Accounting",
issn = "1094-4060",
publisher = "Elsevier BV",
number = "4",

}

Corporate social responsibility, institutional environments, and tax avoidance : evidence from a subnational comparison in China. / LIN, Kenny Z.; CHENG, Suwina; ZHANG, Fang.

In: International Journal of Accounting, Vol. 52, No. 4, 12.2017, p. 303-318.

Research output: Journal PublicationsJournal Article (refereed)

TY - JOUR

T1 - Corporate social responsibility, institutional environments, and tax avoidance : evidence from a subnational comparison in China

AU - LIN, Kenny Z.

AU - CHENG, Suwina

AU - ZHANG, Fang

N1 - This paper won the 36th International Business Research Conference Best Paper Award. Kenny Lin acknowledges financial support from Lingnan University (Funding Ref. DR13A1).

PY - 2017/12

Y1 - 2017/12

N2 - We examine the association between mandatory corporate social responsibility (CSR) disclosure and economic contribution (tax payments) in China, where we expect this association to be affected by a region's institutional attributes. Exploiting a dataset that shows cross-regional variations in institutions, we find that in regions with lower institutional quality, firms claiming to be socially responsible actually avoid taxes, whereas CSR disclosure in other regions is more aligned with the social responsibility aspect of tax compliance. Our study contributes to the literature by demonstrating that in the absence of proper institutions, CSR disclosure is likely to remain a form of window dressing.

AB - We examine the association between mandatory corporate social responsibility (CSR) disclosure and economic contribution (tax payments) in China, where we expect this association to be affected by a region's institutional attributes. Exploiting a dataset that shows cross-regional variations in institutions, we find that in regions with lower institutional quality, firms claiming to be socially responsible actually avoid taxes, whereas CSR disclosure in other regions is more aligned with the social responsibility aspect of tax compliance. Our study contributes to the literature by demonstrating that in the absence of proper institutions, CSR disclosure is likely to remain a form of window dressing.

KW - Business ethics and social responsibility

KW - Institutions

KW - Tax avoidance

KW - Transition economies

UR - http://commons.ln.edu.hk/sw_master/6677

UR - https://www.scopus.com/inward/record.uri?eid=2-s2.0-85033793213&doi=10.1016%2fj.intacc.2017.11.002&partnerID=40&md5=87db0ddffef328895bf0d881549d3f99

U2 - 10.1016/j.intacc.2017.11.002

DO - 10.1016/j.intacc.2017.11.002

M3 - Journal Article (refereed)

VL - 52

SP - 303

EP - 318

JO - International Journal of Accounting

JF - International Journal of Accounting

SN - 1094-4060

IS - 4

ER -