Bruce Carruthers, Northwestern University

Do Socially Responsible Corporations Pay Taxes? CSR and effective Tax Rates
Bruce Carruthers


Winter 2020
Lecture Time: 
Friday, March 13, 2020 - 1:30pm to 3:00pm
Lecture Location: 
R0220 Ross School of Business


Abstract: The social responsibilities of for-profit corporations have gained importance recently, and CSR has become both a goal and a set of guidelines for various corporate activities. CSR encompasses a number of dimension, typically including environmental impacts, treatment of employees, and relations to local communities. Here we consider the relationship between CSR and corporate taxes: do firms that are “good citizens” also pay higher taxes? Is it the social responsibility of firms to help pay for public services? Focusing on the percentile rank of effective tax rates, and using random effects panel regression of a data set of publicly-traded U.S. firms that includes measures of CSR and many financial variables, we find that the relationship between CSR and taxation is a complicated one that warrants further investigation. However, strong corporate governance, a typical component of CSR, is associated with lower tax rates, suggesting that responsibility to shareholders conflicts with broader social responsibilities.

Recording & Additional Notes

Short bio: Bruce G. Carruthers is the John D. MacArthur Professor of Sociology at Northwestern University and Non-resident Long-term Fellow at the Swedish Collegium for Advanced Study. He received his PhD from the University of Chicago in 1991 and works in the areas of comparative-historical sociology, economic sociology, and the sociology of law, with research funding coming from the National Science Foundation, the American Bar Foundation, the Russell Sage Foundation, the Institute for New Economic Thinking, and the Tobin Project. He has written five books, most recently Money and Credit: A Sociological Approach, as well as numerous articles. Carruthers has been a visiting fellow at the Russell Sage Foundation, the Radcliffe Institute for Advanced Study, the Wissenschaftskolleg zu Berlin, the Kluge Center at the Library of Congress, the Swedish Collegium for Advanced Study, and was the recipient of a Guggenheim fellowship. Recently, he was the president of the Society for the Advancement of Socio-Economics, and is finishing a book on the history of credit, and credit decision-making in the U.S. during the 19th and 20th-centuries.