Research On The Impact Of ESG Performance On Corporate Tax Avoidance

The realization of sustainable development is not only an internal requirement for the longterm survival of enterprises,but also a powerful driving force to ensure the steady progress of social economy.In recent years,China has been promoting economic transformation and reform,and guiding its enterprises to achieve green and sustainable economic development.In this context,the environmental,social responsibility and corporate governance(ESG)performance of enterprises has attracted wide public attention,and more and more enterprises are also incorporating ESG performance into their operational and investment decision-making processes to evaluate their overall performance.ESG has gradually become a research hotspot for scholars at home and abroad.Existing studies on ESG performance mostly focus on corporate value,financing cost and other aspects,while few scholars have studied the tax avoidance effect of ESG performance.Therefore,this paper attempts to investigate the impact and mechanism of ESG performance on corporate tax avoidance in view of the lack of research on ESG performance and corporate tax avoidance.Firstly,this paper reviews the literature on the factors affecting corporate tax avoidance,the economic effect of ESG performance,and the relationship between ESG performance and corporate tax avoidance.The relationship between ESG performance and corporate tax avoidance and its mechanism are analyzed theoretically,and the theoretical hypothesis of this paper is put forward:the better corporate ESG performance,the higher the degree of tax avoidance.ESG has a more significant tax avoidance effect on non-state-owned enterprises,non-high-tech enterprises,enterprises with low regional tax collection and administration,and enterprises in non-heavily polluting industries.ESG performance increases the degree of tax avoidance by reducing enterprise risk and improving product market power.The degree of marketization weakens the positive relationship between ESG performance and corporate tax avoidance.Secondly,the research sample in this paper is the data of China’s A-share listed companies from 2011 to 2020.On the basis of defining core variables of corporate ESG performance and corporate tax avoidance degree,this paper not only shows the typical facts of the two,but also conducts a preliminary study on the relationship between the two through the scatter plot,mean and median difference test.It is preliminarily concluded that ESG performance has a positive impact on corporate tax avoidance.Thirdly,the bidirectional fixed effect model is used for empirical test.On the one hand,the impact of ESG performance on corporate tax avoidance is tested.The empirical results show that the better the corporate ESG performance,the higher the corporate tax avoidance degree.According to the grouping results based on firm heterogeneity,the conclusion that ESG performance increases corporate tax avoidance is more significant in non-state-owned enterprises,non-high-tech enterprises,enterprises with low regional tax collection and administration,and enterprises in non-heavily polluting industries.On the other hand,this paper further examines the mechanism of the influence of ESG performance on corporate tax avoidance,and finds that corporate ESG performance mainly increases its tax avoidance behavior by reducing corporate risks.However,the degree of local marketization weakens the positive relationship between ESG performance and corporate tax avoidance to some extent.Finally,the main conclusions of this paper are summarized.From the perspective of enterprises and the government,this paper puts forward some relevant policy suggestions on how to promote enterprises to pay taxes according to law and improve the ESG evaluation system.