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Tax avoidance and corporate social responsibility: you can't do both, or can you?
journal contribution
posted on 2023-06-09, 03:17 authored by Lutz PreussPurpose: The payment of taxes is both a crucial corporate contribution to society and essential to good governance; but it is an under-researched aspect of corporate social responsibility (CSR). Hence this paper first seeks to examine whether companies that engage in tax avoidance through locating their headquarters in tax havens - or Offshore Finance Centres (OFCs) - make any claims to act socially responsibly. If so, the paper, second, aims to investigate how being based in an OFC impacts on the firm's commitment to key organisational stakeholders. Design/methodology/approach: In the light of the sensitivity of the issue, the research questions are studied through an analysis of the content of codes of conduct that have been adopted by a sample of firms based in OFCs. The results are compared with a sample of US firms. Findings: OFC-based firms do indeed make claims that they engage in responsible business practices. However, the commitments by OFC-based companies vis-Ã -vis key stakeholders fall in almost all cases short of those made by the sample of US firms. Originality/value: With regard to CSR theory, the paper shows how organisational legitimacy is the result of a complex interaction between strategic legitimacy efforts by OFC-based companies and isomorphic processes in the wider social system. In terms of CSR practice, the paper argues that claims to acting socially responsibly by firms that do not even fully meet their economic responsibilities to society may, in the longer term, undermine the very idea of CSR.
History
Publication status
- Published
Journal
Corporate Governance: The international journal of business in societyISSN
1472-0701Publisher
EmeraldExternal DOI
Issue
4Volume
10Page range
365-374Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2016-10-06Usage metrics
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