Does corporate social responsibility affect tax avoidance: Evidence from family firms

Abstract

AbstractThe purpose of this paper is to shed light on the effect of corporate social responsibility performance on tax avoidance. It also examines whether family ownership affects tax avoidance practices by socially responsible performance. Based on an international sample of 6,442 firm‐year observations from 2006 to 2014, we use several panel‐data regression models. We find that social and environmental performance is negatively related with tax avoidance so that firms with a greater socially responsible performance show a lower tax‐saving practices. However, we find that this negative relation is lower in family‐owned firms, what suggests that despite the fact that family firms show a greater socially responsible behavior aimed to preserve their socioemotional endowments, family ownership is positively associated with tax avoidance practices.