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http://ssrn.com/abstract=1904004
 
 

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Corporate Social Responsibility, Tax Avoidance, and Tax Aggressiveness


Luke Watson


University of Florida - Fisher School of Accounting

November 20, 2012

2011 American Accounting Association Annual Meeting - Tax Concurrent Sessions

Abstract:     
I examine the relationship between corporate social responsibility, tax avoidance, and tax aggressiveness. I find evidence of a general negative relation between CSR and effective tax rates (ETRs). This relationship is driven by socially responsible firms, which have lower ETRs than other firms consistent with greater tax avoidance. Socially responsible firms also have higher unrecognized tax benefits than other firms, consistent with greater tax aggressiveness. The results suggest that firms are not willing to reduce their profits in order to demonstrate social responsibility on a tax dimension, confirming a Friedman (1970) shareholder view of corporate social responsibility in which firms undertake socially responsible actions only when it is profit-maximizing.

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Date posted: August 3, 2011 ; Last revised: June 19, 2013

Suggested Citation

Watson, Luke, Corporate Social Responsibility, Tax Avoidance, and Tax Aggressiveness (November 20, 2012). 2011 American Accounting Association Annual Meeting - Tax Concurrent Sessions. Available at SSRN: http://ssrn.com/abstract=1904004 or http://dx.doi.org/10.2139/ssrn.1904004

Contact Information

Luke Watson (Contact Author)
University of Florida - Fisher School of Accounting ( email )
Warrington College of Business
PO Box 117166
Gainesville, FL 32611-7166
United States
352-273-0208 (Phone)
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