Does media influence tax avoidance? the moderating role of corporate social responsibility

The role of media scrutiny in influencing corporate behavior has gained increasing attention, particularly concerning tax practices. This study explored how negative media coverage affected corporate tax avoidance among firms listed on the French SBF 120 index from 2010 to 2023. Employing panel regression techniques, the analysis investigated whether adverse media attention deters aggressive tax strategies. The robustness analysis found that negative media coverage generally reduced tax avoidance, but it encouraged aggressive tax strategies when coupled with a high governance, social, and environmental (ESG) score. This implies that companies with strong ESG scores may adopt such strategies to fund Corporate Social Responsibility initiatives and regain legitimacy. These findings suggested that ESG performance can, under certain conditions, alter the impact of media scrutiny. The study emphasized the need for regulators to integrate tax transparency into ESG reporting standards, highlighting tax behavior as a vital component of corporate accountability. By shedding light on the interplay between media exposure and ESG factors, this research offers novel insights into the drivers of corporate tax behavior in a socially conscious business environment.