Abstract
Corporate social responsibility disclosure, political connection and tax aggressiveness have become the focus of the media. By using samples of China’s listed firms from 2008 to 2014, this study examines the relationship among corporate social responsibility disclosure, political connection and tax aggressiveness. The results show that corporate social responsibility disclosure significantly strengthens the possibility of tax aggressiveness; firms with no or less close political connections can make use of the disclosure of corporate social responsibility to do tax aggressiveness. Furthermore, the change of political connection can significantly weaken the positive association between corporate social responsibility disclosure and tax aggressiveness. However, some data are collected by hands and that may cause some deviations. These findings help governments, managements and investors evaluate firm’s behavior and make decisions.
Highlights
The problem of tax aggressiveness has always been a hot spot in the society and media at home and abroad
For enterprises with strong political connections, the policy support and tax concessions they have obtained are in a favorable position to compete in the market so there is no need to spend a large amount of costs to conduct additional disclosure of social responsibility information and exacerbate the expenditure pressure on enterprises this paper proposes the third research hypothesis: H3: Relative to enterprises with strong political connections, enterprises with weaker political connections are more likely to be tax-aggressive by disclosing social responsibility information
Relative to enterprises with political connection, enterprises with no political connection are more likely to be tax-aggressive by disclosing social responsibility information
Summary
The problem of tax aggressiveness has always been a hot spot in the society and media at home and abroad. Disclosure of social responsibility information need to pay cost. Will it affect the corporate tax policy? Will political connections affect the relationship between social responsibility information disclosure and tax aggressiveness? The paper is to answer the following questions: Is there any relationship between the disclosure of corporate social responsibility and the taxation radicalism? The strength of political and changes of political connection affect the relationship between social responsibility information disclosure and tax aggressiveness?. Lanis and Richardson (2012) [4] find that social responsibility information disclosure is negatively correlated with effective tax rates; Hoi et al (2013) [5] argue that companies with excessive non-social responsibility activities are more aggressive in tax avoidance. Chen ical connections on the relationship between the two and reduce the negative externalities, so as to provide investors with decision-making information
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