Abstract
Recent years have seen a considerable increase in the literature concerning the separate areas of corporate social responsibility and corporate tax aggressiveness. However, comparatively little scholarly attention has been paid to the link between the two. This paper examines how the different activities of corporate social responsibility affect corporate tax aggressiveness. A structural model was tested using partial least squares regression to determine whether the relationships between corporate social responsibility dimensions and tax aggressiveness are positive or negative. Based on a sample of French publicly listed firms, the results indicate that a firm's tax aggressiveness depends on the nature of its corporate social responsibility activities. Notably, the study demonstrates that greater the activity in the social dimension of corporate social responsibility, the lower the level of corporate tax aggressiveness will be, whereas high activity in the economic dimension is associated with a high level of tax aggressiveness. These results extend the prior literature concerning the relationship between corporate social responsibility and tax aggressiveness and suggest that the nature of the relationship, whether negative or positive, tends to differ across the corporate social responsibility dimensions. Overall, the study provides unique insight into the association between CSR activities and corporate tax aggressiveness. Indeed, the paper strongly supports the current literature and argues that the dimensions of corporate social responsibility should not be aggregated into a single measure because interesting and explanatory information is lost when such a method is used, especially with regard to an issue like corporate tax aggressiveness.