Corporate Social Responsibility, Institutional Environments, and Tax Avoidance: Evidence from a Subnational Comparison in China

Kenny Z. Lin*, Suwina Cheng, Fang ZHANG

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    45 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
    DOIs
    Publication statusPublished - Dec 2017

    Scopus Subject Areas

    • Accounting
    • Finance

    User-Defined Keywords

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

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