Purpose

The purpose of this paper is to shed light on the effect of tax avoidance on corporate social responsibility performance. It also investigates whether audit quality affects tax avoidance practices by socially responsible performance.

Design/methodology/approach

Based on a sample of French non-financial companies over the period 2005 to 2016, this paper uses panel data regressions. The authors apply generalized least square panel regression to overcome autocorrelation and heteroscedasticity problems. For further robustness, this paper runs instrumental variable regressions using the three-stage instrument variable method (three-stage least square).

Findings

The results show that firms with high CSR scores are more likely to engage in aggressive tax avoidance. The findings also show that firms audited by high-quality auditors are more likely to get involved in CSR for hedging against the potential consequences of aggressive tax avoidance practices.

Research limitations/implications

The findings are consistent with risk management theory, which suggests that firm’s hedge against any reputational risks that might arise from avoiding taxes by engaging more in CSR.

Practical implications

Results have implications for policymakers in that CSR firms audited by high-quality auditors may engage in CSR to overcome any negative reactions that could be caused as a result of tax avoidance. Thus, they need to be cautious about managers’ opportunistic behavior and enhance monitoring to enforce social compliance and to be tax compliant.

Originality/value

This paper extends the existing literature by examining the effect of audit quality on the relationship between CSR performance and corporate tax avoidance. Audit quality is deemed to be an important governance feature that is likely to constraint managerial opportunistic behaviors. Audit quality, along with CSR performance, are associated with a higher level of tax avoidance.

中文翻译：

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企业社会责任和避税：法国公司的案例

目的

本文旨在阐明避税对企业社会责任绩效的影响。它还调查了审计质量是否会通过对社会负责的表现影响避税行为。

设计/方法/方法

本文基于 2005 年至 2016 年期间法国非金融公司的样本，使用面板数据回归。作者应用广义最小二乘面板回归来克服自相关和异方差问题。为了进一步稳健，本文使用三阶段工具变量法（三阶段最小二乘法）运行工具变量回归。

发现

结果表明，企业社会责任得分高的公司更有可能进行激进的避税行为。调查结果还表明，由高质量审计师审计的公司更有可能参与企业社会责任，以对冲激进避税做法的潜在后果。

研究限制/影响

研究结果与风险管理理论一致，这表明公司通过更多地参与企业社会责任来对冲可能因避税而产生的任何声誉风险。

实际影响

结果对决策者有影响，因为由高质量审计师审计的企业社会责任公司可能会参与企业社会责任，以克服可能因避税而引起的任何负面反应。因此，他们需要对经理的机会主义行为保持谨慎，并加强监督以加强社会责任和税收合规。

原创性/价值

本文通过检验审计质量对企业社会责任绩效与企业避税之间关系的影响来扩展现有文献。审计质量被认为是可能限制管理机会主义行为的重要治理特征。审计质量以及企业社会责任绩效与更高水平的避税相关。