A Study on the Relevance between Socially Responsible Investment and Book-Tax Difference

사회책임투자와 회계이익-과세소득 차이 간의 관련성 연구

  • Ryu, Ye-Rin (Management Institute, Pusan National University) ;
  • Ji, Sang-Hyun (Division of Business & commerce, Baekseok University) ;
  • Lee, Gyeong-Rak (Division of Business & commerce, Baekseok University)
  • Received : 2017.12.13
  • Accepted : 2018.02.20
  • Published : 2018.02.28


We examined the level of Earnings Management of Socially Responsible Investment(SRI) Corporate by using Book-Tax Difference(BTD). We used 2,718 sample data from 2011 to 2016 on Korea Stock Exchange. In short, the result of this study's is as followed. Socially Responsible Investment(SRI) have a negative relevance with Book-Tax Difference(BTD). Therefore this study can support that a firm has a high level of Socially Responsible Investment(SRI) will have the better the Quality of Accounting according to our study. This study contributes as follow. we can confirm that the more Socially Responsible Investment(SRI) the better Quality of Accounting Information. And we hope that our study can be helped development of sound capital market and give a useful information to investors on firms that has a high level of Socially Responsible Investment(SRI).


Earnings Management;Book-Tax Difference;Socially Responsible;Investment(SRI);Environment;Social;Governance


  1. A. Kempf & P. Osthoff. (2007). The effect of socially responsible investing on portfolio performance. European Financial Performance, 13, 908-922.
  2. S. Brammer, C. Brook & S. Pavelin. (2006). Corporate Social Performance and Stock Returns : UK Evidence from Disaggregate Measures. Financial Management, 35, 97-116.
  3. M. Statman & D. Glushkov. (2009). The Wages of social responsibility. Financial Analysts Journal, 65, 33-46.
  4. H. J. Jung. (2008). Investment Performance Comparison of SRI Funds and General Stock Funds. Doctoral dissertation. Yeungnam University. Daegu.
  5. K. R. Joh. (2009). A study on the performance of socially responsible investment fund. Doctoral dissertation. Catholic University. Seoul.
  6. H. R. Kim & J. H. Choi. (2009). An Explanatory Study on the Performance of Socially Responsible Funds in Korea. Management Research, 24(1), 159-190.
  7. H. K. Ryu. (2009). Performance of SRI Comparing to General Funds in Korea. Doctoral dissertation. Seoul University. Seoul.
  8. Y. Na. & W. B. Lim. (2011). An Empirical Study on the Value Relevance of ESG Information. Management Education Research, 26(4), 439-467.
  9. S. W. Jang. & Y. H. Kim. (2013). Corporate ESG and Long-Run Financial Performance. Financial Management Research, 30(1), 131-152.
  10. M. H. Choi, H. Y. Kim. & J. G. Seo. (2017). The Effect of Corporate Social Responsibility Investment Performance on the Tax Aggressiveness and Firm Value. Accounting Research, 22(3), 47-69.
  11. Y. Na & S. H. Lee. (2017). The Effects of K-IFRS Adoption on Book Income-Tax Income Difference. Accounting Research, 21(3), 201-229.
  12. J. I. Park & K. H. Kim. (2002). The Influence of Tax Costs and Earnings Management on Book-Tax Income Differences. The Accounting Review, 27(2), 81-115.
  13. J. Phillips, M. Pincus & S. Rego. (2003). Earnings Management : New Evidence Based on Deferred Tax Expense. The Accounting Review, 78(2), 491-521.
  14. L. Mills & K. Newberry. (2001). The Influence of Tax and Nontax Costs on Book-tax Reporting Difference : Public and Private Firms. Journal of the American Taxation, 23, 1-19.
  15. B. Lev & D. Nissim. (2004). "Taxable Income, Future Earnings, and Equity Values. The Accounting Review, 79, 1039-1074.
  16. I. K. Joo, W. W. Choi & J. I. Yunm. (2005). A Study on the Usefulness of Book-Tax Differences as a Metric for detecting Earnings Management. The Accounting Review, 30(2), 237-275.
  17. M. Hanlon. (2005). The Persistense and Pricing of Earings, Accruals, and Cash Flows When Firms Have Large Book-Tax Differences. The Accounting Review, 80(1), 137-166.
  18. Y. R. Ryu & S. H. Ji. (2017). The Effect of an Ownership Structure and Audit Quality on the Book-Tax Difference. Tax Accounting Research, 53, 105-124.
  19. Y. R. Ryu, S. H. Ji, K. B. Lee & J. H. Moon. (2017). A Study on the Relevance between Book-Tax Difference and Crediting Rating : In the Group of Large Book-Tax Difference. Tax Accounting Research, 54, 123-141.
  20. H. J. Choi & D. C. Moon. (2013). The Relationship between Corporate Social Responsibilities and Accounting Transparency. The Accounting Review, 38(2). 135-171.
  21. Y. H. Kim. (2014). The Effect of CSR on Earnings Management and Firm Value. The Tax Accounting Research, 40, 147-163.