In this article, we examine the effect of mandatory disclosure of corporate social responsibility on firm's investment behavior. Our analysis exploits China's 2008 mandatory requirement that firms disclose their corporate social responsibility activities. Using difference-indifference design, the study finds that firms that were made to report their corporate social responsibility experience a decrease in the level of investment, but the firm investment efficiency improved, especially on alleviating over-investments. These findings suggest that mandatory CSR disclosure alters firm investment behavior and the implementation of such a disclosure requirement may need the government support.

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This paper investigates the effect of targeted economic sanctions by the United States and the European Union on the performance of intra‐industry non‐sanctioned firms. Using data of non‐sanctioned firms listed on the Zimbabwe stock exchange during the period 2009–2018, our regression results show that non‐sanctioned firms in the same industry as sanctioned firms perform better than ordinary non‐sanctioned firms, signalling the positive competitive effect. A mediating test suggests that sanctions increase the market share of non‐sanctioned firms in the same industry as sanctioned firms and subsequently increase their performance.

We examine the effects of targeted economic sanctions on the performance of nontargeted firms sharing a common supply chain with targeted firms. We build on sanctions literature and contagion theory to develop a conceptual model that encapsulates the nexus between targeted sanctions, supply chains, and firm performance. Drawing on data from Zimbabwe, we find that nontargeted firms in the same supply chain as sanctioned firms perform poorly compared with other non‐sanctioned firms, signaling the effects of contagion. The mediation test indicates that economic sanctions reduce the performance of nontargeted supply chain member firms through reducing sales and increasing the cost of products, showing significant mediating effects. We also show that exports greatly affect nontargeted firms that depend heavily on targeted firms, whereas imports have a relatively low impact. The results of this study extend previous research on the adverse consequences of economic sanctions and supply chain networks and provide important guiding significance for firm managers, investors and policymakers on how to respond to smart sanctions.

We hypothesize that tax planning behaviour mitigates a firm's financial constraints, and this effect is more pronounced in non-state-owned enterprises and big firms compared to their counterparts. We use data for Chinese listed firms during the period 2010-2018 to test the hypotheses, based on both ordinary least squares and fixed-effect models. The regression results show that tax planning is positively and significantly associated with mitigation of financial constraints, suggesting that cash tax savings are likely to improve firms' financial slack. This effect is stronger for non-state-owned enterprises, big firms, non-political firms and firms in the eastern region of China. Further analyses reveal that, in the long run, tax planning increases firms' financial constraints, supporting Scholes-Wolfson's point of view of tax planning, that minimizing taxes is not the same as effective tax planning. These results are robust to various tests. Overall, our results suggest that minimizing tax generally produces immediate cash flow benefits and mitigates financial constraints in the short run; however, in the long run, firms should adopt sustainable financing strategies.