Corporate social responsibility and profit shifting

Hasan, I., Karavitis, P. , Kazakis, P. and Leung, W. S. (2024) Corporate social responsibility and profit shifting. European Accounting Review, (doi: 10.1080/09638180.2024.2303971) (Early Online Publication)

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This paper examines the relation between corporate social responsibility (CSR) performance and tax–motivated income shifting. Using a profit–shifting measure estimated from multinational enterprises (MNEs) data, we find that parent firms with higher CSR scores shift significantly more profits to their low-tax foreign subsidiaries. Overall, our evidence suggests that MNEs engaging in CSR activities acquire legitimacy and moral capital that temper negative responses by stakeholders and thus have greater scope and chance to engage in unethical profit-shifting activities, consistent with the legitimacy theory.

Item Type:Articles
Keywords:Corporate social responsibility, legitimacy theory, risk management, profit shifting, corporate tax systems.
Status:Early Online Publication
Glasgow Author(s) Enlighten ID:Karavitis, Dr Panagiotis and Kazakis, Dr Pantelis
Authors: Hasan, I., Karavitis, P., Kazakis, P., and Leung, W. S.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:European Accounting Review
Publisher:Taylor and Francis
ISSN (Online):1468-4497
Published Online:09 February 2024
Copyright Holders:Copyright © 2024 European Accounting Association
First Published:First published in European Accounting Review 2024
Publisher Policy:Reproduced in accordance with the publisher copyright policy

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