The effect of corporate social responsibility on tax avoidance: the moderating role of political connections

Purpose This study investigates the relationship between corporate social responsibility (CSR) and tax avoidance (TA) and examines whether political connections (PC) moderate this relationship among manufacturing firms in Jordan. Design/methodology/approach Using a quantitative approach, the study analyzes panel data from 33 manufacturing firms listed on the Amman Stock Exchange (ASE) over the period 2013–2024. Year–firm fixed effects panel regression models were applied to control for unobservable heterogeneity, with TA measured through the effective tax rate (ETR), cash flow effective tax rate (CFETR) and book–tax difference (BTD). Findings The results show that CSR is associated with lower levels of TA, supporting the view that socially responsible firms adopt more compliant tax behavior. However, PC are linked to higher TA and weaken the constraining effect of CSR, indicating that politically connected firms rely more on political legitimacy than social legitimacy to maintain their reputation. These findings highlight the conditional nature of CSR's ethical influence in emerging markets. Originality/value The study extends legitimacy and stakeholder theories to the taxation domain by showing that while CSR enhances ethical compliance and accountability, its effectiveness is diminished in politically connected environments. The findings provide valuable implications for policymakers and regulators seeking to strengthen CSR frameworks and ensure alignment between ethical responsibility and fiscal transparency.