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

17 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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