This study aims to examine the effect of responsible governance on tax avoidance and the moderating effect of corporate social responsibility (CSR), business ethics and green innovation on this relationship.
The authors relied on a sample of 475 ESG index companies from 2013 to 2022, using the feasible generalized least squares (FGLS) method. To test robustness, the authors included an alternative measure of tax avoidance, applied the generalized method of moments (GMM) to address endogeneity, and accounted for the specific impact of the COVID-19 pandemic.
The results demonstrate that responsible governance significantly reduces tax avoidance. Furthermore, CSR, business ethics and green innovation reinforce this effect, confirming their moderating role.
The study provides practical advice to managers and policymakers on integrating governance, CSR, business ethics and green innovation to combat tax avoidance.
This study sheds light on the impact of responsible governance on corporate tax avoidance by highlighting the moderating role of CSR and business ethics and green innovation. Although these factors are interrelated, they capture distinct dimensions of corporate responsibility, offering a more comprehensive understanding of governance mechanisms. It also makes a unique contribution by showing that green innovation strengthens this link, which has not been previously studied.
