Bridging the gap between corporate social responsibility performance and tax aggressiveness The moderating role of national culture

Purpose This paper addresses the role of corporate social responsibility (CSR) performance as a potential mechanism for reducing firms' likelihood of engaging in tax aggressiveness (TAG). The paper also contributes to the existing literature by addressing the moderating effect of national cultures on the link between CSR performance and corporate TAG. Design/methodology/approach The focus is placed on an unbalanced panel of 2,696 companies distributed in 30 countries and seven economic sectors over the period of 2002-2014. Findings The results provide support for those companies achieving high corporate social performance (CSP), corporate environmental performance (CEP) and corporate governance performance (CGP) being less likely to engage in aggressive tax practices. Finally, the results identify some national cultural dimensions moderating the link between disaggregated measures of CSR performance and firms' TAG. Research limitations/implications - The difficulty of accessing CSR and TAG data for non-listed companies could bias the data set towards a compliant company profile because of the higher visibility. In addition, the use of effective tax rates to examine firms' TAG should be interpreted with some caution. Practical implications - The paper's findings provide unique and useful information for company stakeholders and managers aiming to address the factors that enhance firms' incentives to engage in aggressive tax practices. Originality/value This paper addresses the multidimensional nature of CSR performance by analysing the links between CSP, CEP and CGP and corporations' TAG. Furthermore, the research addresses the way in which national culture moderates the links between disaggregated measures of CSR performance and corporate TAG.