Corporate governance, tax avoidance, and corporate social responsibility: Evidence of emerging market of Nigeria and frontier market of Pakistan

Figures & data

Table

Variables	Measurement	Sources
Dependent Variable
CSR	The expenditures in CSR for instance, education, donations, health, social welfare, natural disaster, sports (Bagh et al., 2017).	Annual Reports
Independent variables
Tax Avoidance	Effective Tax Rate = Income tax/pre-tax income (Wen et al., 2020).	Annual Reports
Board Size	The total no of directors on the board (Orazalin, 2019).	Annual Reports
Board Independence	The % of independent directors on the board (Orazalin, 2019).	Annual Reports
Board Gender Diversity	The % of female directors on the board (Orazalin, 2019).	Annual Reports
Board Nationality	The ratio of foreigner members to total size of the board (Ilogho, 2017).	Annual Reports
Ownership Concentration	The % of shares held by the largest owner of the firm (Orazalin, 2019).	Annual Reports
Control Variables
Firm Age	No of years since the establishment of firms.	Google Website
Firm Size	Ln of Total Assets.	Annual Reports
Big 4 Auditors	Dummy variable and equal to 1 if the corporation is audited by any one of the big 4 auditors otherwise.	Audited financial reports
Listing in Foreign markets	Dummy Variable and equal to 1 if the corporation is listing in foreign markets otherwise.	Google Website
Total Assets	Value of Total assets in annual in a given year	Annual Reports
ROA	EBIT/Total Assets	Annual Reports
ROE	EBIT/Shareholder Equity	Annual Reports

Table 1. Summary statistics

Variable	Obs	Mean	Std. Dev.	Min	Max
Panel A—Statistics for Nigerian listed companies
CSR	397	16.734	2.195	10.597	22.353
ETR	552	.117	2.107	−47.4	8.1
BSIZE	574	9.76	2.906	4	20
BINDP	575	.72	.128	.29	1
BGNDR	573	.166	.128	0	.667
OWCON	552	41.556	24.849	0	100
BNATN	546	.18	.214	0	1
BIG4	559	.717	.451	0	1
AGE	558	45.799	64.46	2	63
ROA	754	.059	.363	−.886	9.269
SIZE	753	7.589	.928	3.96	10.17
Panel B—Statistics for Pakistan listed companies
CSR	940	15.754	2.216	8.517	21.469
ETR	1152	−.097	1.004	−22.32	15.205
BSIZE	1152	8.403	1.673	5	17
BINDP	1152	.176	.15	0	.8
BGNDR	1152	.11	.5	0	.9
BNATN	1152	.096	.17	0	1
OWCON	1152	63.241	19.939	0	99.999
AGE	1152	43.378	23.924	3	173
BIG4	1152	.586	.493	0	1
ROA	1152	.124	.186	−.372	3.019
SIZE	1152	23.464	1.662	18.65	28.924

Table 2. Correlation matrix

		ETR		LNCSR		BSIZE		BINDP		BGNDR		BNATN		OWCON		AGE		BIG4	ROA		SIZE
Panel A—For Nigerian listed companies
ETR		1
LNCSR		−0.0550		1
BSIZE		−0.170***		0.512***		1
BINDP		0.0550		−0.0152		−0.128*		1
BGNDR		0.00274		0.117*		−0.0697		−0.204***		1
BNATN		0.0330		0.133**		0.0644		0.267***		−0.217***		1
OWCON		0.0732		0.147**		−0.0633		0.263***		−0.119*		0.527***		1
AGE		0.00335		0.0855		−0.0241		−0.00880		0.0152		0.255***		0.114*		1
BIG4AUD		−0.0464		0.146**		0.0801		−0.0346		0.0952		−0.0343		0.181***		0.0617		1
ROA		0.0525		0.0832		−0.134**		0.141**		0.00425		0.105*		0.203***		0.0378		−0.0322	1
SIZE		0.0602		0.425***		0.345***		−0.0911		0.0544		0.0482		0.0502		0.0413		0.105*	−0.0850		1
Panel B—For Pakistan listed companies
ETR	1
LNCSR	0.0210		1
BSIZE	0.0666*		0.310***		1
BINDP	0.0354		0.232***		0.0709*		1
BGNDR	−0.0746*		−0.00263		−0.0848**		−0.00629		1
BNATN	0.0190		−0.0257		0.0420		−0.0928**		0.00228		1
OWCON	0.0378		0.0729*		−0.00585		0.0628		−0.0985**		0.349***		1
AGE	0.0358		0.124***		0.0790*		0.0430		−0.0477		−0.0490		0.147***		1
BIG4	0.0279		0.0942**		0.0620		0.136***		0.0788*		0.0971**		0.0608		−0.0688*		1
ROA	−0.0202		0.140***		0.0127		−0.0138		0.00755		0.172***		0.0380		−0.104**		0.0773*			1
SIZE	0.0703*		0.585***		0.361***		0.236***		−0.0915**		0.0851**		0.157***		0.146***		0.116***			−0.0876**		1

*p < 0.05, ** p < 0.01, *** p < 0.001.

Table 3. Corporate responsibility and tax avoidance in Nigeria

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	FE	FE	FE	FE	FE	FE
LNCSR	0.250**	0.274**	0.184	0.246**	0.243**	0.200
	(0.122)	(0.125)	(0.129)	(0.122)	(0.121)	(0.128)
BIG4		−0.641				−1.189
		(0.707)				(0.769)
AGE			0.104*			0.129**
			(0.0552)			(0.0576)
ROA				0.688*		1.421*
				(1.876)		(1.906)
SIZE					0.474**	0.491**
					(0.191)	(0.191)
Constant	−4.101**	−3.996*	−8.076***	−4.087**	−7.666***	−12.40***
	(2.050)	(2.053)	(2.939)	(2.061)	(2.505)	(3.287)
Observations	395	395	391	386	386	383
R-squared	0.013	0.016	0.024	0.013	0.032	0.052
Number of companies	76	76	76	76	76	76
F-test	4.195	2.507	3.873	2.077	5.142	3.336
Prob > F	0.041	0.083	0.022	0.127	0.006	0.006

Standard errors in parentheses*** p< 0.01, ** p< 0.05, * p< 0.1

Table 4. Corporate social responsibility and tax avoidance in Pakistan

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	FE	FE	FE	FE	FE	FE
LNCSR	0.00897	0.00643	0.00204	0.00885	0.00344	0.00295
	(0.0322)	(0.0322)	(0.0335)	(0.0323)	(0.0340)	(0.0343)
BIG4		0.248*				0.238*
		(0.128)				(0.130)
AGE			0.00976			0.00677
			(0.0130)			(0.0213)
ROA				0.0194		0.0273
				(0.230)		(0.243)
SIZE					0.0491	−0.0124
					(0.0954)	(0.160)
Constant	−0.247	−0.355	−0.574	−0.247	−1.323	−0.307
	(0.509)	(0.511)	(0.670)	(0.509)	(2.151)	(3.034)
Observations	940	940	940	940	940	940
R-squared	0.001	0.005	0.008	0.001	0.004	0.050
Number of companies	112	112	112	112	112	112
F-test	0.0777	1.914	0.320	0.0423	0.172	0.800
Prob > F	0.781	0.148	0.727	0.959	0.842	0.550

Standard errors in parentheses*** p< 0.01, ** p< 0.05, * p< 0.1

Table 5. Corporate governance and corporate social responsibility in Nigeria

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	FE	FE	FE	FE	FE	FE
BIG4	0.805**	0.748**	0.700**	0.722**	0.721**	0.780**
	(0.350)	(0.342)	(0.347)	(0.342)	(0.342)	(0.358)
AGE	0.118***	0.114***	0.113***	0.127***	0.116***	0.133***
	(0.0253)	(0.0251)	(0.0256)	(0.0298)	(0.0253)	(0.0313)
ROA	0.647	0.634	0.467	0.540	0.493	0.646
	(0.864)	(0.853)	(0.860)	(0.856)	(0.857)	(0.876)
SIZE	−0.0162	−0.00311	−0.0083	−0.0090	−0.0085	−0.0157
	(0.0863)	(0.0854)	(0.0854)	(0.0854)	(0.0855)	(0.0869)
BNATN	0.890					0.978
	(0.794)					(0.825)
OWCON		−0.00296				−0.00419
		(0.00598)				(0.00617)
BINDP			−0.386			−0.311
			(0.833)			(0.845)
BGNDR				−0.663		−0.700
				(0.919)		(0.935)
BSIZE					−0.0142	−0.0274
					(0.0452)	(0.0468)
Constant	10.41***	10.84***	11.16***	10.31***	10.85***	10.52***
	(1.366)	(1.331)	(1.609)	(1.460)	(1.379)	(1.818)
Observations	379	384	381	381	381	379
R-squared	0.106	0.099	0.102	0.103	0.101	0.110
Number of companies	76	76	76	76	76	76
F-test	7.046	6.674	6.790	6.858	6.764	4.032
Prob > F	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

Standard errors in parentheses*** p< 0.01, ** p< 0.05, * p< 0.1

Table 6. Corporate governance and corporate social responsibility in Pakistan

	(1)	(2)	(3)	(4)	(5)	(6)
VARIABLES	FE	FE	FE	FE	FE	FE
BIG4	−0.0643	−0.0572	−0.0587	−0.0583	−0.0572	−0.0658
	(0.132)	(0.133)	(0.133)	(0.133)	(0.133)	(0.133)
AGE	−0.00714	−0.0117	−0.00710	−0.0134	−0.0123	−0.00444
	(0.0217)	(0.0216)	(0.0225)	(0.0219)	(0.0218)	(0.0230)
ROA	0.975***	0.930***	0.924***	0.928***	0.931***	0.957***
	(0.245)	(0.245)	(0.246)	(0.246)	(0.246)	(0.247)
SIZE	0.928***	0.918***	0.904***	0.914***	0.917***	0.912***
	(0.159)	(0.160)	(0.161)	(0.160)	(0.160)	(0.161)
BNATN	−1.621**					−1.613**
	(0.738)					(0.743)
OWCON		0.00200				0.00254
		(0.00433)				(0.00434)
BINDP			0.306			0.252
			(0.394)			(0.397)
BGNDR				−0.0455		−0.0399
				(0.119)		(0.120)
BSIZE					−0.0057	−0.0154
					(0.0539)	(0.0542)
Constant	−6.489**	−6.728**	−6.127*	−6.575**	−6.557**	−6.057*
	(3.068)	(3.087)	(3.138)	(3.078)	(3.120)	(3.200)
Observations	940	940	940	940	940	940
R-squared	0.122	0.117	0.118	0.117	0.117	0.123
Number of companies	112	112	112	112	112	112
F-test	22.92	21.87	21.96	21.86	21.83	12.78
Prob > F	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

Standard errors in parentheses*** p< 0.01, ** p< 0.05, * p< 0.1

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