When Good Deeds Conceal Tax Games: A Board Oversight View
摘要
The dark side of CSR has been documented in recent literature. Using corporate tax avoidance (CTA) as evidence, this chapter addresses the conundrum of how to reduce the potentially negative edge of the CSR sword by examining the possible channels through which the CSR-driven CTA can be mitigated. We investigate how the ‘busyness’ function of independent directors (i.e., holding multiple directorships across firms) mitigates the potential CTA-increasing impact of CSR in the Chinese listed firms. In accordance with the reputation risk management theory, our results initially confirm that more socially responsible firms engage in aggressive CTA, but this is significantly alleviated when busy independent directors are present. Our results remain robust after a battery of treatments on endogeneity and sample selection biases and quasi-natural experiments employing the difference-in-differences estimations on a regulatory shock.