75 Commerce & Management Quarterly, Vol.18, No.1, pp.75~100(2017)

FINANCIAL PERFORMANCE, CORPORATE TAX AND

CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE

*

Chi-Ping Hou Professor, Department of Accounting,

China University of Technology

Yu-Chin Tsai Assistant Professor, Department of Accounting,

China University of Technology

Bor-Hwang Ni Assistant Professor, Department of Public Finance,

China University of Technology

Tzu-Wen Lee Lecturer, Department of Accounting,

China University of Technology

* 56 (02)2931-3416 2287

E-mail: yuchin@gm.cute.edu.tw

76

2009 2013

ABSTRACT

The increasing popularity of corporate social responsibility (CSR) during the past few years has made it a trend that companies start to voluntarily publish their CSR reports. The purpose of this paper is to investigate the relationship among financial performance, corporate tax and corporate social responsibility disclosure. Our samples include the firms listed on Taiwan Stock Market from 2009 to 2013. The results show that financial performance is significantly positively related to CSR report disclosure, and corporate income tax payment is significantly negatively related to CSR report disclosure. The results imply that companies with good performance tend to disclose their CSR reports, and they have more resource to be engaged in tax planning, hence these companies pay less income tax than other companies. Recent Taiwan authorities promote to disclose CSR information. Our findings suggest enhance firms information transparency through CSR reports with firms tax planning information.

Keywords: Corporate Social Responsibility, Corporate Tax, Financial Performance

77

Corporate Social ResponsibilityCSR CSR CSR CSR

CSR 2004 CSR CSR CSR CSR

2014 9 18

2015 CSR 11 CSR CSR 11 26 CSR

90 CSR 1997 2001

WBCSD CSR 2000 CSR

78

McKendalll, Sanchez, & Sicilian, 1999Molloy, Erekson, & Gorman, 2002 CSR

CSR Cochran & Wood, 1984Stanwick & Stanwick, 1998 CSR

1953 Howard R. Bowen Social Responsibilities of the BusinessWorld Business Council for sustainable DevelopmentWBCSDCSR

2009 CSR 1.80 2.NGO3.4.

(2009) CSR Cornell and Shapiro1987

CSR Turban &

79

Greening, 1996Alexander & Buchholz, 1978Poter & Linde, 1995Fombrun, Gardberg, & Barnett, 2000

2013

CSR CSR

CSR CSR

Cormier and Gordon2001Al-Tuwaijri, Christensen, and Hughes2004Richardson and Welker2001

2013 2014 CSR Global Reporting InitiativesGRI CSR 2015 CSR

CSR

Porter & Kramer, 2007Gao, 2011 CSR 1999 13 2000

2002 CSR 2004 1 CSR 2006 9 2007 CSR CSR 20012012

80

CSR

CSR CSR

Szilagyi1984

Venkatraman and Ramanujam1986

CSR CSR 2000CSR Smith, 2007 CSR Cochran and Wood1984 1970 1979 40 CSR

CSR Ullmann198513 8 4l l Preston and OBannon1997

Waddock and Graves1997 CSR CSR CSR CSR

81

McWilliams & Siegel, 2000McKendalll, Sanchez, & Sicilian, 1999Molloy, Erekson, & Gorman, 2002 CSR Corporate social performanceCSPGriffin and Mahon1997 1972 1997 CSP 51 33 9 19 CSR CSR McWilliams and Siegel2000 1991 1996 524 CSR Cardebat and Sirven 2010 2000 2008 154

20082009CSP CSP 2011CSR CSR 2013CSR

CSR

CSR CSR CSR McGuire1988Toutsoura2004Fombrun and Shanley1990CSR

Slack Resources Theory CSR CSR McWilliams & Siegel, 2000McKendalll et al., 1999Molloy et al., 2002

82

CSR CSR 2010

CSR

2015

Google 2006 200 Erle, 2006

OECD FTSE 100 CSR

2015

2004 1

2009 CSR CSR

CSR Watson2012 CSR CSR

83

Lanis and Richardson2012 Watson

CSR Huseynov and Klamm2012 CSR CSR

CSR 20132014 CSR

2014 CSR CSR

CSR CSR CSR CSR

2001 14 2001 CSR 2005 1 2001 2013 CSR 2008 CSR 2%2009 40

2009 25%2010 17% 2009 2013 2TEJ

7,160 2

84

1 2001 2013 CSR

2 2009 2013

20% 3 55.196%

(%) CSR CSR (%)

2001 1,215 6.853 14 1.152

2002 1,253 7.066 14 1.117

2003 1,283 7.240 14 1.091

2004 1,308 7.378 14 1.070

2005 1,339 7.553 17 1.270

2006 1,370 7.727 19 1.387

2007 1,392 7.852 25 1.796

2008 1,409 7.947 35 2.484

2009 1,421 8.015 40 2.815

2010 1,433 8.083 59 4.117

2011 1,435 8.094 81 5.645

2012 1,435 8.094 111 7.735

2013 1,436 8.100 161 11.212

17,729 6.853 604 3.407

(%) CSR CSR (%)

2009 1,421 19.85 40 2.815

2010 1,433 20.01 59 4.117

2011 1,435 20.04 81 5.645

2012 1,435 20.04 111 7.735

2013 1,436 20.06 161 11.212

7,160 100.00 452 6.312

85

3 (%)

34 0.475 124 1.732 135 1.885 280 3.911 372 5.196 80 1.117

592 8.268 25 0.349 35 0.489 210 2.933 55 0.768 25 0.349

3,952 55.196 349 4.874

125 1.746 115 1.606

124 1.732 99 1.383 60 0.838

369 5.154

7,160 100.000

CSR CSR CSR 1 0

EARNING

86 CSR 2014Minnick & Noga, 2010

TAXCH

1.RD

Hanlon and Terry2005

Gupta & Newberry, 1997

2.CAPINT

Graham and Tucker2006Chen, Chen, and Shevlin2010

3.BIG

CSR BIG 1 0

4.ELEC

CSR ELEC CSR ELEC 1 0

5.LOSS

1 0

87

6.LEV

DeAngelo,DeAngelo, and Skinner1994

7.SIZE

Ullmann1985

Waddock and Graves1997

SIZE

Probit

CSRi,t = 01EARNINGi,t2TAXCH i,t3RD i,t4CAPINT i,t5 BIG i,t6 ELEC i7 LOSS i,t8 LEV i,t9SIZE i,ti,t

1 99 1-percentile99-percentile 7,160 4 CSR 0.063EARNINGTAXCH 0.044 0.006RD 0.026CAPINT 0.508BIG 0.861ELEC 0.552LOSSLEVSIZE 0.2220.35415.019

88

4 CSR

CSREARNING

TAXCHRDCAPINT

BIGELECLOSS

LEVSIZE

Pearson 5TAXCHLOSSEARNING 0.3780.718 0.3 VIF 3

6 CSR Proibt EARNING 10%=0.806,Z1.827 CSR

CSR McWilliams & Siegel, 2000McKendalll et al., 1999Molloy et al., 2002

CSR 0.000 1.000 0.063 0.000 0.000 0.000 0.243

EARNING -0.418 0.266 0.044 0.051 0.006 0.104 0.105

TAXCH 0.000 0.051 0.006 0.001 0.000 0.009 0.010

RD 0.000 0.210 0.026 0.010 0.001 0.031 0.040

CAPINT 0.000 3.092 0.508 0.278 0.095 0.690 0.613

BIG 0.000 1.000 0.861 1.000 1.000 1.000 0.346

ELEC 0.000 1.000 0.552 1.000 0.000 1.000 0.497

LOSS 0.000 1.000 0.222 0.000 0.000 0.000 0.415

LEV 0.040 0.798 0.354 0.341 0.220 0.469 0.173

SIZE 6.875 21.418 15.019 14.842 14.079 15.814 1.409

89

CSREARNING

TAXCHRDCAPINTBIG

ELECLOSSLEVSIZE

6 CSR Probit Model : CSRi,t = 01EARNINGi,t2TAXCH i,t3RD i,t4CAPINT i,t5 BIG i,t6 ELEC i

7 LOSS i,t8 LEV i,t9SIZE i,ti,t Coef Z-value C -8.119 -26.426***

EARNING 0.806 1.827* TAXCH -10.015 -2.876***

RD 1.833 2.535** CAPINT -0.024 -0.569

BIG 0.372 3.310*** ELEC 0.389 6.584*** LOSS 0.188 1.992** LEV -0.451 -2.683***

5 CSR Pearson EARNING TAXCH RD CAPINT BIG ELEC LOSS LEV SIZE

CSR .029** -.033*** .002 .036*** .076*** .029** .079 .010 .294***

EARNING 1 .378*** -.092*** -.175*** .132*** -.062*** -.718*** -.199*** .183***

TAXCH 1 .035*** -.088*** .092*** -.008 -.234*** -.140*** -.027**

RD 1 -.093*** .276*** .100*** -.179*** -.252*** .276***

CAPINT 1 -.054*** -.133*** .164*** .084*** .100***

BIG 1 .109*** -.085*** -.059*** .118***

ELEC 1 .089*** -.094*** -.060***

LOSS 1 .121*** -.191***

LEV 1 .154***

****** 10%5%1%

90

6

SIZE 0.392 20.839*** Pseudo-R2 0.190

LR2 642.346 n 7,160

****** 10%5%1%

CSREARNING

TAXCHRDCAPINT

BIGELECLOSSLEV

SIZE

CSR Waddock & Graves, 1997Molloy et al., 2002

TAXCH 1% =-10.015Z=-2.876 CSR

CSR

CSR

RD 5%=1.833Z=2.535 CSR BIG 1%=0.372Z=3.310 CSR ELECLOSSSIZELEV CSR CAPINT

CSR

91

3

()

Logit EARNING=1.224Z=1.373CSR TAXCH 5%=-20.338Z=-2.765 CSRRD 5%=3.708Z=2.515 CSR BIG 1%=0.761Z=2.963 CSR ELECLOSSSIZELEVCAPINT

()

2001 CSR 2001 20132009 Rate 2001-2008 0 2009-2013 1 Probit EARNING CSR EARNING 5%=0.849z=2.499 CSR TAXCH CSR TAXCH CSR =-1.392Z=-0.627RDBIGEIECSIZELEVLOSSCAPINT

92

CSR CSR 2015 CSR

CSR CSR CSR CSR CSR 2009 2013 CSR

CSR CSR

CSR

CSR

CSR CSR CSR 4

93

2015 200 CSR CSR

CSR

CSR CSR CSR CSR

1. 2004

2. 2001-2008 2009-2013 TAXCH

3.

4. 2012 10 3 12

94

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7. (2010)26

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Authors Introduction

Name Chi-Ping Hou Department Professor, Department of Accounting, China University of Technology 56 Address No.56, Sec.3, Hsing-Lung Rd., Wen-Shan District, Taipei, Taiwan E-mail chipingh@cute.edu.tw Speciality Management Accounting, Auditing, Corporate Governance

Name Yu-chin Tsai Department Assistant Professor, Department of Accounting, China University of

Technology 56 Address No.56, Sec.3, Hsing-Lung Rd., Wen-Shan District, Taipei, Taiwan E-mail yuchin@gm.cute.edu.tw Speciality Auditing, Tax Law, Tax Accounting

100 Name Bor-Hwang Ni Department Assistant Professor, Department of Public Finance, China University of

Technology 56 Address No.56, Sec.3, Hsing-Lung Rd., Wen-Shan District, Taipei, Taiwan E-mail nickni@cute.edu.tw Speciality Auditing, Internal Control, Tax law

Name Tzu-Wen Lee Department Lecturer, Department of Accounting, China University of Technology 56 Address No.56, Sec.3, Hsing-Lung Rd., Wen-Shan District, Taipei, Taiwan E-mail arthur@cute.edu.tw Speciality Performance Evaluation, Corporate Governance, Earnings Management