Corporate Social Responsibility Impact on Tax Avoidance: Empirical Evidence from Vietnam

Abstract

Background: Corporate social responsibility (CSR) has received increasing attention recently, with several studies attempting to explore the relationship between CSR and tax avoidance, with mixed results. These researchers have found a negative association between CSR and tax avoidance, but some other views found a positive and statistically significant relationship between tax avoidance and CSR. Objective: The study examined the effect of CSR on tax avoidance in Vietnam-listed companies. The study also tested the moderating effect of the power of the chief executive officer of the companies examined. Methodology: The study uses a data sample of 499 listed non-financial companies from 2016 to 2022 with 3,493 observations. The feasible generalised least squares model was used to assess the impact of CSR with the moderating effect of CEO power on tax avoidance. Result: The research results acknowledge the moderating role of CEO power on the relationship between social responsibility and tax avoidance at the 1% significance level. This means that companies run by powerful CEOs disclose much CSR information, increasing tax avoidance. Conclusion: CSR significantly influences tax avoidance, but there is a moderating role for CEO power in Vietnam. Unique contributions: This study has contributed to a better understanding of the significant positive influence of social responsibility in Vietnamese listed companies on tax avoidance when a powerful CEO runs the company. Key recommendation: The Board of Directors of Vietnamese listed companies should consider appointing the unit's founder to the position of CEO to avoid excessively increasing power and tax avoidance.

Keywords

• Corporate social responsibility (CSR), tax avoidance, CEO power, Vietnam