Overconfident CEOs, corporate social responsibility, and tax avoidance: Evidence from China
Year: 2025
Type: article
Abstract: We investigate the influence of CEO overconfidence on the relationship between corporate social responsibility (CSR) and tax avoidance. Prior studies on the relationship between CSR and tax avoidance find mixed results. Using granular data of listed Chinese companies, we find that firms with higher CSR scores systematically exhibit higher tax avoidance. Importantly, we find that this relationship is moderated in firms with overconfident CEOs. We contend that overconfident CEOs are less likely to strategically use CSR as a risk-management tool. Additional analysis shows that this moderating effect comes mainly from non-state-owned enterprises. Our findings stand up to a battery of sensitivity tests, including the use of CSR subdimensions. In summary, we provide consistent evidence about the moderating effect of CEO overconfidence on the relationship between CSR and tax avoidance. These results partially reconcile the mixed findings of prior empirical literature.
Institution: University of Glasgow
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,490
OpenAlex ID: W4410629798