CSR and tax avoidance: A review of empirical research

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Jost Kovermann ORCID logo, Patrick Velte ORCID logo


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This article is a literature review that covers quantitative empirical research on the association between corporate social responsibility (CSR) and corporate tax avoidance. We conduct a structured literature review and evaluate the empirical-quantitative results with regard to the CSR–tax avoidance link and vice versa. The association between CSR and tax avoidance is both theoretically and empirically ambiguous. However, the majority of studies finds a negative association between CSR and tax avoidance. Nevertheless, results are highly dependent on measurement of the respective constructs and other marginal conditions. Comparability of recent research on the issue is in particular limited due to heterogeneous CSR and tax avoidance metrics and due to a potentially bidirectional relationship. Results imply that there is not necessarily a stable association between CSR performance, as measured by CSR scores or ratings, CSR reporting, and a firm’s tax practices. Thus, socially responsible investors have to make a decision about whether they are prepared to invest in firms that have high CSR scores and strong CSR performance while aggressively avoiding taxes. Investors who perceive tax payments as part of a firm’s responsibility towards society, have to select their investments with great care, as CSR scores and CSR reporting are of only limited informative value with regard to tax avoidance.

Keywords: Tax Avoidance, Tax Planning, CSR, Stakeholder Theory, Agency Theory, Gender Diversity

Authors’ individual contribution: Conceptualization – J.K. and P.V.; Investigation – J.K. and P.V.; Resources – J.K. and P.V.; Writing – Original Draft – J.K. and P.V.; Writing – Review & Editing – J.K. and P.V.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: H26, M14, M40

Received: 22.07.2020
Accepted: 28.12.2020
Published online: 05.01.2021

How to cite this paper: Kovermann, J., & Velte, P. (2021). CSR and tax avoidance: A review of empirical research. Corporate Ownership & Control, 18(2), 20-39. https://doi.org/10.22495/cocv18i2art2