Tax Avoidance and Corporate Social Responsibility: A Meta-Analysis

Abstract

ABSTRACT We analyze 117 estimates from 23 studies that examine the relationship between corporate social responsibility (CSR) and corporate tax aggressiveness. The meta-regression results indicate that both CSR and tax avoidance proxies play a role in explaining the differences in estimates of primary studies. Data samples and econometric specifications also explain some of the heterogeneity. We use meta-regression results to predict the association between CSR and tax avoidance for several hypothetical and plausible study designs and find either no or a small to moderate association between the constructs, indicating that firms decouple CSR from tax avoidance. Interestingly, evidence suggests that such a relationship exists in settings of extreme CSR and tax avoidance behaviors. Academic research has not yet explored the determinants of the heterogeneity of the empirical evidence on the relationship between CSR and tax avoidance. This meta-analysis fills this gap and provides useful insights for future research, practice, and regulation. JEL Classifications: C19; H26; M14.