Corporate Social Performance and Taxation: A Swedish Perspective

Abstract: In this thesis we investigate the correlation between the level of social responsibility of firms (CSP) and taxation. Further on, we study corporate hypocrisy regarding taxation in corporate social responsibility and the incentives for tax avoidance for high versus low performing CSP firms in an environment in which the corporate tax rate decreases. We find strong evidence that CSP and taxation is positively correlated. We do not find significant results when testing for a relationship between CSP and corporate hypocrisy. Neither are we able to provide any definite results as to how low versus high performing CSP firms respond to a decreasing corporate tax rate. However, our study still implies that such relationships exists, both regarding CSP and corporate hypocrisy, and the responsiveness of differently rated CSP firms to decreasing tax rates.