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Does Corporate Social Responsibility Influence Corporate Tax Avoidance of Chinese Listed Companies?

Author

Listed:
  • M.A. Gulzar

    (School of Business, Zhejiang University City College, Hangzhou 310015, China; Waikato Management School, The University of Waikato, Hamilton 3240, New Zealand)

  • Jacob Cherian

    (College of Business, Abu Dhabi University, P.O. Box 59911 Abu Dhabi, UAE)

  • Muhammad Safdar Sial

    (Department of Management Sciences, COMSATS University Islamabad (CUI), Islamabad 44000, Pakistan)

  • Alina Badulescu

    (Department of Economics and Business, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania)

  • Phung Anh Thu

    (Faculty of Finance and Accounting, Nguyen Tat Thanh University, Ho Chi Minh City 700000, Vietnam)

  • Daniel Badulescu

    (Department of Economics and Business, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania)

  • Nguyen Vinh Khuong

    (Faculty of Accounting and Auditing, University of Economics and Law, VNU-HCM, Ho Chi Minh City 700000, Vietnam)

Abstract

The primary objective of this paper is to empirically examine whether corporate social responsibility (CSR) influences corporate tax avoidance (CTA) of Chinese listed companies. The study is based on a sample of 3481 firm-year observations from 2009 to 2015 using CSR ratings from the Rankins (RKS) corporate social responsibility ratings agency in China, and all financial data extracted from the China Stock Market and Accounting Research (CSMAR). The authors foundthat CSR is negatively related to the current and cash effective tax rate (proxies of corporate tax avoidance), suggesting that responsible firms are more involved in tax avoidance as compared to less responsible firms. Their findings are robust against different control variables. Additionally, to the best of the authors’ knowledge, the paper is one of the first to document an empirical association between CSR and corporate tax avoidance of Chinese listed companies.

Suggested Citation

  • M.A. Gulzar & Jacob Cherian & Muhammad Safdar Sial & Alina Badulescu & Phung Anh Thu & Daniel Badulescu & Nguyen Vinh Khuong, 2018. "Does Corporate Social Responsibility Influence Corporate Tax Avoidance of Chinese Listed Companies?," Sustainability, MDPI, vol. 10(12), pages 1-12, December.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:12:p:4549-:d:187206
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