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License to Kill: Examining Licensing Effect in the Context of Corporate Social Responsibility and Tax Reporting from the Consumers’ Perspective

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Corporate Responsibility and Digital Communities

Abstract

Previous research has indicated that adopting Corporate Social Responsibility (CSR) activities may license unethical tax reporting behavior. By applying the Legitimacy Theory as a framework, this study examined the licensing effect from the consumer’s perspective, exploring whether consumers assume that a company known to invest in CSR activities would engage in aggressive tax avoidance practices. To this end, 331 college students rated their perceptions of major companies drawn from various sectors, regarding their CSR engagements and their tax avoidance practices. Findings demonstrated that consumers perceived companies to be more aggressive in tax avoidance practices when these companies were rated high in investment in extrinsic CSR (environmental protection and community relations). This effect was not found for intrinsic CSR (corporate governance, working environment and business ethics).

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Author information

Authors and Affiliations

  1. Peres Academic Center, Rehovot, Israel

    Anat Toder-Alon, Tali Te’eni-Harari, Estery Giloz & Eyal Rosenstreich

Authors
  1. Anat Toder-Alon
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  2. Tali Te’eni-Harari
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  3. Estery Giloz
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  4. Eyal Rosenstreich
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Editor information

Editors and Affiliations

  1. Henley Business School, Greenlands Henley-on-Thames, UK

    Georgiana Grigore

  2. Bucharest University of Economic Studies, Bucharest, Romania

    Alin Stancu

  3. Bournemouth University, Poole, Dorset, UK

    David McQueen

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Toder-Alon, A., Te’eni-Harari, T., Giloz, E., Rosenstreich, E. (2018). License to Kill: Examining Licensing Effect in the Context of Corporate Social Responsibility and Tax Reporting from the Consumers’ Perspective. In: Grigore, G., Stancu, A., McQueen, D. (eds) Corporate Responsibility and Digital Communities. Palgrave Studies in Governance, Leadership and Responsibility. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-63480-7_12

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