The Role of Gender Diversity on Tax Aggressiveness and Corporate Social Responsibility: Evidence from Italian Listed Companies

Andrea Vacca,Demetris Vrontis,Monica Fait,Antonio Iazzi

doi:10.3390/su12052007

Andrea Vacca, Demetris Vrontis + Show 2 more

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https://doi.org/10.3390/su12052007

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Journal: Sustainability	Publication Date: Mar 5, 2020
Citations: 38	License type: CC BY 4.0

Affiliation: University of Salento, University of Nicosia

Abstract

The paper aims to examine the moderating role of gender diversity within a corporate board on the relationship between tax aggressiveness and a firm’s corporate social responsibility (CSR) approach. This analysis was conducted using a set of indicators of financial statements of 168 Italian listed firms between 2011 and 2018. In addition, the sustainability reports of the same companies were observed. To perform the analysis a logit regression model is used. This paper shows different empirical results. First, this study notes that there is not a direct relationship between tax aggressiveness and CSR reporting. Second, gender diversity in a board of directors increases the orientation of companies to CSR disclosure, but does not have an impact on the relationship between tax aggressiveness and CSR disclosure. Instead, CEO gender has a positive influence on the relationship between corporate tax planning and CSR reporting in accordance with Global Reporting Initiative (GRI) standards. This study emphasizes the key role of gender diversity in the growth of the CSR approach and the reputation of companies. Therefore, governments and policymakers of major countries should promote gender diversity in corporate decision-making bodies, which contributes to achieving the Sustainable Development Goals (SDGs).

Highlights

In recent years, there has been an increase in the number of studies [1,2,3] on the effects of the adoption of corporate tax planning within the business environment
The analysis shows that %WOM and CEO woman (CEOW) are positively associated with corporate social responsibility (CSR) disclosure, simultaneously, this study notes that SIZET impacts negatively on CSR reporting
In line with the United Nations’ [22] Agenda 2030 and Sustainable Development Goals (SDGs) 5 and its sub-target 5.5 in particular, this study enriches the debate on the role of gender diversity within the business environment, showing how gender diversity could cover a key role within the governance structure of a firm

Summary

Introduction

There has been an increase in the number of studies [1,2,3] on the effects of the adoption of corporate tax planning within the business environment. A tax planning strategy or tax aggressiveness is a managerial strategy adopted by a company to reduce its tax burdens and, as a consequence, to minimize its tax liability in compliance with the country framework [4]. According to Lanis and Richardson [5], these strategies are becoming common features within the business environment, as taxes represent a critical factor in the decision-making process of a company. The debate that attracted the attention of many scholars is focused on the study of a tax strategy as part of corporate social responsibility (CSR) [1,6,7]. The engagement in the long-term by a firm on these ethical practices is a critical factor in its survival and success [9,10,11]

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