Corporate social responsibility performance and information asymmetry: the moderating role of ownership concentration

Abstract

Purpose This paper aims to examine the moderating effect of ownership concentration on the relationship between corporate social responsibility performance (CSRP) and information asymmetry using a sample of Chinese firms. Design/methodology/approach The authors use a sample of 208 listed firms from nine different sectors in China over the period of 2008–2018. They use the generalized method of moment approach to examine the dynamic relationship between CSRP, information asymmetry and ownership concentration. CSRP index is constructed using environmental performance, social performance and corporate governance performance measures. Findings The results indicate that CSRP positively affects the information asymmetry. Moreover, by taking ownership concentration as a moderating variable, the results indicate that ownership concentration negatively moderates the association between CSRP and information asymmetry. Research limitations/implications The findings of the study advance the understanding of CSR practices in China. The findings have important implications for the regulators and managers in China for adopting socially responsible activities for the improvement of firm performance and protecting shareholder rights. Originality/value The study extends the existing research on the association between CSRP and information asymmetry by including the ownership concentration as a moderating variable. The research showed that CSR plays an important role in reducing the informational gap between managers and outside stakeholders. However, the relationship between CSR and information asymmetry is not studied yet with the moderating role of ownership concentration.

The effect of corporate governance, corporate social responsibility and information asymmetry on the value of Indonesian-listed firms

“…Richardson (2000) stated that a firm with a high degree of information asymmetry is evidence of shareholders’ inability to monitor managers’ actions because of resource constraints, a lack of incentives or impaired access to relevant information. This has the potential to impose agency costs, leading to declining firm value (Tang and Chang, 2015; Rehman et al , 2022). CSR disclosure mitigates the information asymmetry between managers and shareholders (Cho et al , 2013; Cui et al , 2018; Hamrouni et al , 2022).…”

أثر تنظيم الإفصاحات الاختيارية غير المالية على الأداء المالي للبنوک المصرية في ضوء عدم تماثل المعلومات دراسة تطبيقية

“…‫المصلحة‬ ‫أصحاب‬ ‫لألطراف‬ ‫توصيلها‬ ‫بغرض‬ ‫وذلك‬ ‫االجتماعي،‬ ‫أدائها‬ ‫عن‬ (Rehman, et al ,2021;Wan-Hussin, et al ,2021).…”

Corporate social responsibility, internal control, and firm financial performance

“…Furthermore, studies investigate the association between CSR and performance from different research perspectives, such as firm risk management (e.g., Naseem et al, 2019 ), information asymmetry (e.g., Rehman et al, 2022 ), government intervention (e.g., Wen and Fang, 2008 ), firm value (e.g., Chen and Lee, 2017 ), also for different country studies such Spain (e.g., Martínez-Campillo et al, 2012 ), Saudi Arabia ( Dkhili and Dhiab, 2019 ), Bangladesh (e.g., Dhar et al, 2022 ). These different research perspectives, research subjects, and differences in research means and variables definition above lead to inconsistent findings in existing studies, making it necessary to investigate the relationship between CSR and firm financial performance (e.g., Huang et al, 2020 ).…”