The impact of corporate social responsibility on operating cash flow opacity: the moderating role of tax avoidance

This study examines the association between corporate social responsibility (CSR) and operating cash flow opacity (OCFOP). The current study also aims to examine the moderating effect of corporate tax avoidance on the relationship between CSR and OCFOP. The sample used in this research incorporates non-financial companies listed on the EGX from 2012 to 2021. The final sample comprised of 52 companies with 520 observations. Statistical analysis was performed using pooled OLS and random effects regression analysis. The current research indicates that there is a significant positive relationship between companies engaging in CSR practices and having a higher level of OCFOP. Further, corporate tax avoidance is found to have a positive moderating role as it strengthens the relationship between CSR and OCFOP. The current research findings have several implications for Egyptian and emerging market regulators, investors and shareholders in the Egyptian market, including the fact that CSR practices are not always an indicator of ethical behavior, as they may be used to conceal unethicality underneath. To the best of our knowledge, this study represents an initial endeavor to elucidate the moderating impact of corporate tax avoidance on the correlation between CSR and OCFOP in an emerging market context. This contribution expands upon the existing literature on CSR and opacity by presenting novel empirical findings from an emerging market, thereby illuminating the moderating function of tax avoidance. Early investigations primarily concentrated on the direct link between CSR and OCFOP.