CSR and tax aggressiveness of Malaysian listed companies: evidence from an emerging economy


Mohanadas, Nirmala Devi and Abdullah Salim, Abdullah Sallehhuddin and Lim, Kwee Pheng (2019) CSR and tax aggressiveness of Malaysian listed companies: evidence from an emerging economy. Social Responsibility Journal, 16 (5). pp. 597-612. ISSN 1747-1117

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Purpose–This study aims to examine how corporate social responsibility (CSR) performance andcorporate tax aggressiveness relate in Malaysia, an emerging economy in Southeast Asia. It also seeks toanalyse how CSR performance in community, environment, marketplace and workplace themes relate tothe tax aggressiveness of listed companies in this country.Design/methodology/approach–This study analyses 182 companies listed in the Main Market ofBursa Malaysia from 2010 to 2012 using fixed-effects panel regression and ordinary least squareregression. It uses current effective tax rate as a proxy for corporate tax aggressiveness and measuresCSR performance using specially developed CSR performance disclosure index.Findings–This study finds no statistical support that CSR performance is related to corporate taxaggressiveness in Malaysia. Similarly, there are no statistically significant relationships betweenenvironment-related and marketplace-related CSR performance and corporate tax aggressiveness.Nevertheless, community-related CSR performance has significant negative relationship with corporatetax aggressiveness. Workplace-related CSR performance meanwhile has significant positive relationshipwith corporate tax aggressiveness.Originality/value–This study expands the current literature’s focus on developed economies by examiningthe relationship between CSR and corporate tax aggressiveness in the setting of an emerging Asian economy,i.e. Malaysia. It is also the first empirical study focussing on this relationship among Malaysian listed companies.

Item Type: Article
Uncontrolled Keywords: Social responsibility of business, Corporate social responsibility (CSR), Emerging economy, Corporate tax aggressiveness, Effective tax rate (ETR), Fixed-effects panel regression
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management > HD60-60.5 Social responsibility of business
Divisions: Faculty of Business (FOB)
Depositing User: Ms Rosnani Abd Wahab
Date Deposited: 25 Dec 2020 05:43
Last Modified: 25 Dec 2020 05:43
URII: http://shdl.mmu.edu.my/id/eprint/7889


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