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Does social capital constrain firms’ tax avoidance?

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Does social capital constrain firms’ tax avoidance? / Chircop, Justin; Fabrizi, Michele; Ipino, Elisabetta; Parbonetti, Antonio.

In: Social Responsibility Journal, Vol. 14, No. 3, 2018, p. 542-565.

Research output: Contribution to journalJournal articlepeer-review

Harvard

Chircop, J, Fabrizi, M, Ipino, E & Parbonetti, A 2018, 'Does social capital constrain firms’ tax avoidance?', Social Responsibility Journal, vol. 14, no. 3, pp. 542-565. https://doi.org/10.1108/SRJ-08-2017-0157

APA

Chircop, J., Fabrizi, M., Ipino, E., & Parbonetti, A. (2018). Does social capital constrain firms’ tax avoidance? Social Responsibility Journal, 14(3), 542-565. https://doi.org/10.1108/SRJ-08-2017-0157

Vancouver

Chircop J, Fabrizi M, Ipino E, Parbonetti A. Does social capital constrain firms’ tax avoidance? Social Responsibility Journal. 2018;14(3):542-565. https://doi.org/10.1108/SRJ-08-2017-0157

Author

Chircop, Justin ; Fabrizi, Michele ; Ipino, Elisabetta ; Parbonetti, Antonio. / Does social capital constrain firms’ tax avoidance?. In: Social Responsibility Journal. 2018 ; Vol. 14, No. 3. pp. 542-565.

Bibtex

@article{787a26bae08f4ae0a4757f2942cf7240,
title = "Does social capital constrain firms{\textquoteright} tax avoidance?",
abstract = "PurposeThis paper aims to investigate whether the level of social capital of the region in which a firm is headquartered affects its tax avoidance activities. Social capital can be defined as the mutual trust in society and literature shows that firms headquartered in high social capital regions exhibit higher level of corporate social responsibility. Recent research suggests that some stakeholders consider tax avoidance as a socially irresponsible and illegitimate activity, whereas others deem corporate tax payments as detrimental to social welfare because they hurt economic development. Building on this debate, the relationship between social capital and tax avoidance is empirically investigated.Design/methodology/approachA sample of 52,962 firm-year observations over the period 1990-2014 was used to empirically investigate the relationship between social capital and tax avoidance.FindingsConsistent with the idea that managers consider corporate tax payments as a socially responsible action, evidence was found that firms headquartered in areas with high social capital engage significantly less in tax avoidance activities. It was also documented that the negative impact of social capital on tax avoidance is stronger in the presence of high religiosity, high corporate performance and lower sensitivity of CEO{\textquoteright}s compensation to stock volatility.Originality/valueThis paper extends research on social capital and improves the understanding of the effect of the social environment on managerial decision. Importantly, by studying the relationship between social capital and tax avoidance, the authors add to the recent debate on companies{\textquoteright} perception of the desirability of tax avoidance activities from a social viewpoint.",
author = "Justin Chircop and Michele Fabrizi and Elisabetta Ipino and Antonio Parbonetti",
note = "This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.",
year = "2018",
doi = "10.1108/SRJ-08-2017-0157",
language = "English",
volume = "14",
pages = "542--565",
journal = "Social Responsibility Journal",
issn = "1747-1117",
publisher = "Emerald",
number = "3",

}

RIS

TY - JOUR

T1 - Does social capital constrain firms’ tax avoidance?

AU - Chircop, Justin

AU - Fabrizi, Michele

AU - Ipino, Elisabetta

AU - Parbonetti, Antonio

N1 - This article is (c) Emerald Group Publishing and permission has been granted for this version to appear here. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.

PY - 2018

Y1 - 2018

N2 - PurposeThis paper aims to investigate whether the level of social capital of the region in which a firm is headquartered affects its tax avoidance activities. Social capital can be defined as the mutual trust in society and literature shows that firms headquartered in high social capital regions exhibit higher level of corporate social responsibility. Recent research suggests that some stakeholders consider tax avoidance as a socially irresponsible and illegitimate activity, whereas others deem corporate tax payments as detrimental to social welfare because they hurt economic development. Building on this debate, the relationship between social capital and tax avoidance is empirically investigated.Design/methodology/approachA sample of 52,962 firm-year observations over the period 1990-2014 was used to empirically investigate the relationship between social capital and tax avoidance.FindingsConsistent with the idea that managers consider corporate tax payments as a socially responsible action, evidence was found that firms headquartered in areas with high social capital engage significantly less in tax avoidance activities. It was also documented that the negative impact of social capital on tax avoidance is stronger in the presence of high religiosity, high corporate performance and lower sensitivity of CEO’s compensation to stock volatility.Originality/valueThis paper extends research on social capital and improves the understanding of the effect of the social environment on managerial decision. Importantly, by studying the relationship between social capital and tax avoidance, the authors add to the recent debate on companies’ perception of the desirability of tax avoidance activities from a social viewpoint.

AB - PurposeThis paper aims to investigate whether the level of social capital of the region in which a firm is headquartered affects its tax avoidance activities. Social capital can be defined as the mutual trust in society and literature shows that firms headquartered in high social capital regions exhibit higher level of corporate social responsibility. Recent research suggests that some stakeholders consider tax avoidance as a socially irresponsible and illegitimate activity, whereas others deem corporate tax payments as detrimental to social welfare because they hurt economic development. Building on this debate, the relationship between social capital and tax avoidance is empirically investigated.Design/methodology/approachA sample of 52,962 firm-year observations over the period 1990-2014 was used to empirically investigate the relationship between social capital and tax avoidance.FindingsConsistent with the idea that managers consider corporate tax payments as a socially responsible action, evidence was found that firms headquartered in areas with high social capital engage significantly less in tax avoidance activities. It was also documented that the negative impact of social capital on tax avoidance is stronger in the presence of high religiosity, high corporate performance and lower sensitivity of CEO’s compensation to stock volatility.Originality/valueThis paper extends research on social capital and improves the understanding of the effect of the social environment on managerial decision. Importantly, by studying the relationship between social capital and tax avoidance, the authors add to the recent debate on companies’ perception of the desirability of tax avoidance activities from a social viewpoint.

U2 - 10.1108/SRJ-08-2017-0157

DO - 10.1108/SRJ-08-2017-0157

M3 - Journal article

VL - 14

SP - 542

EP - 565

JO - Social Responsibility Journal

JF - Social Responsibility Journal

SN - 1747-1117

IS - 3

ER -