Corporate social responsibility and corporate tax aggressiveness: Evidence of mandatory vs. voluntary regulatory regimes impact

This study examines the relationship between corporate social responsibility (CSR) and earnings management after controlling for endogeneity of CSR. Using a sample of non-financial firms listed on Korean Securities Market between 2002 and 2010, this study finds that ignoring endogeneity biases the estimated relation between CSR and earnings management. Specifically, the results show that the negative and significant relation between CSR commitment and discretionary accruals reported in the previous studies becomes insignificant. However, the negative and significant relation between CSR commitment and real activities manipulation remains significant even when the endogeneity of CSR commitment is taken into account. Therefore, this study provides evidence that proactive CSR engagement significantly affects firm’s practice of real activities manipulation, while it does not affect its practice of discretionary accruals. These results indicate that CSR commitment leads managers to be more responsible in management of operational activities than in accruals management.

Corporate social responsibility (CSR) reporting plays a key role in management control, particularly in light of the increased demand for non-financial reporting after the financial crisis of 2008–2009. This literature review evaluates 47 empirical studies that concentrate on the influence of several board composition variables on the quantity and quality of CSR reporting. The author briefly introduces the research framework that underpins current empirical studies in this field. This is followed by a discussion of the main variables of board composition: (1) committees (audit and CSR committees), (2) board independence, (3) board expertise, (4) CEO duality, (5) board diversity (gender and foreign diversity), (6) board activity, and (7) board size. The author, then, summarizes the key findings, discusses the limitations of the existing research and offers useful recommendations for researchers, firm practice and regulators.

Understanding the role of the determinants of the ethical decision making in business organizations has become increasingly appealing to the field of business ethics. Various ethical decision making models put more emphasis on a narrow set of determinants. In concert with other contextual factors, these determinants appear to drive the ethical decision making in business organizations. However, in the literature there seems to be room for a more holistic set of determinants, which can explain effectively and holistically the diverse ethical rationales underlying the decision making more effectively. In this paper, the authors set out several ethical models and extract the predominant determinants. After portraying the main literature, the authors conclude that the most recent models are based on the first generation of ethical models, which tend to be more theoretical than empirical. They note the lack of empirical research in this area, which can be explained by both the nature and the intricateness of business ethics. They find that empirical analysis, when it exists, tends to focus on specific variables. The authors highlight at the end of the paper the need for integrative ethical models, which tackle not only the “how” but also the “why” of ethical decision making.