Until now, companies have only managed, economic growth as the primary goal in the face of unlimited competition. But now, companies are seeking a new management paradigm and pursuing sustainability management. If you do not accept the new paradigm in the age of international competition, you will n...
Until now, companies have only managed, economic growth as the primary goal in the face of unlimited competition. But now, companies are seeking a new management paradigm and pursuing sustainability management. If you do not accept the new paradigm in the age of international competition, you will not be able to grow continuously. Sustainability management has become a necessity, not an option.
In this study, we will examine how sustainability management, which can include everything beyond social responsibility (CSR), contributes to tax avoidance in order to achieve sustainable growth. The scores of ESG evaluation methods provided by the Korea Corporate Governance Service were used as non-financial information to assess sustainable management. The composition of the ESG evaluation method is composed of the integrated part(TOT), the governance part(GOR), the social part(SOC), and the environmental part(ENV). The Korea Corporate Governance Service (KCGS) evaluates sustainability management activities of listed corporations through this model and publishes the results. Tax avoidance used the residuals of tax avoidance (TA) to remove the effect of total accruals to eliminate the effect of profit adjustment in BTD proposed by Desai and Dharmapala (2006).
In addition, for the purpose of enhancing the verifiability used the cumulative effective corporation tax rate (ETR), which measures long-term tax avoidance as a measure of tax avoidance, as a second measure of tax avoidance. Unlike previous studies, detailed evaluation of evaluation part of sustainability management can be examined in detail. In the results of the study, the relationship between the ESG score and the tax avoidance showed a significant positive correlation between the total score (TOT) and TA and ETR, showing that the higher the ESG rating, the greater the tax evasion gave. This is in agreement with the argument that the use of sustainability management to create a good image of the company minimizes the risk that stakeholders will accept and that tax avoidance increases in order to raise costs for sustainability management. As corporate managers tend to think of their own interests first rather than the interests of stakeholders, they argue that social responsibility activities are hypocritical because they can use tax avoidance using social responsibility activities for private benefits.
However, there was a difference in the detailed evaluation part. In this respect, it can be expected that the evaluation factors and methods to be emphasized for each evaluated part are different, so that the effect may be different. Through this study, it is possible to analyze the strengths and weaknesses of various aspects of sustainable management evaluation and ESG evaluation in evaluating the value and impact of enterprise, and it will provide incentives for companies to improve in the future.
Thus, this study is an empirical demonstration of how sustainable management affects tax avoidance, and the research results of using ESG assessment by the Korea Governing Body as a proxy for sustainable management on the basis of the existing study are meaningful in that it contributes to generalization.
Until now, companies have only managed, economic growth as the primary goal in the face of unlimited competition. But now, companies are seeking a new management paradigm and pursuing sustainability management. If you do not accept the new paradigm in the age of international competition, you will not be able to grow continuously. Sustainability management has become a necessity, not an option.
In this study, we will examine how sustainability management, which can include everything beyond social responsibility (CSR), contributes to tax avoidance in order to achieve sustainable growth. The scores of ESG evaluation methods provided by the Korea Corporate Governance Service were used as non-financial information to assess sustainable management. The composition of the ESG evaluation method is composed of the integrated part(TOT), the governance part(GOR), the social part(SOC), and the environmental part(ENV). The Korea Corporate Governance Service (KCGS) evaluates sustainability management activities of listed corporations through this model and publishes the results. Tax avoidance used the residuals of tax avoidance (TA) to remove the effect of total accruals to eliminate the effect of profit adjustment in BTD proposed by Desai and Dharmapala (2006).
In addition, for the purpose of enhancing the verifiability used the cumulative effective corporation tax rate (ETR), which measures long-term tax avoidance as a measure of tax avoidance, as a second measure of tax avoidance. Unlike previous studies, detailed evaluation of evaluation part of sustainability management can be examined in detail. In the results of the study, the relationship between the ESG score and the tax avoidance showed a significant positive correlation between the total score (TOT) and TA and ETR, showing that the higher the ESG rating, the greater the tax evasion gave. This is in agreement with the argument that the use of sustainability management to create a good image of the company minimizes the risk that stakeholders will accept and that tax avoidance increases in order to raise costs for sustainability management. As corporate managers tend to think of their own interests first rather than the interests of stakeholders, they argue that social responsibility activities are hypocritical because they can use tax avoidance using social responsibility activities for private benefits.
However, there was a difference in the detailed evaluation part. In this respect, it can be expected that the evaluation factors and methods to be emphasized for each evaluated part are different, so that the effect may be different. Through this study, it is possible to analyze the strengths and weaknesses of various aspects of sustainable management evaluation and ESG evaluation in evaluating the value and impact of enterprise, and it will provide incentives for companies to improve in the future.
Thus, this study is an empirical demonstration of how sustainable management affects tax avoidance, and the research results of using ESG assessment by the Korea Governing Body as a proxy for sustainable management on the basis of the existing study are meaningful in that it contributes to generalization.
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#지속가능경영 ESG평가정보 조세회피
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