Corporate social responsibility, the cost of equity capital and ownership structure: An analysis of Chinese listed firms

Xu, Shaofeng; Liu, Duchi; Huang, Jianbai

doi:10.1177/0312896213517894

Cited by 106 publications

(103 citation statements)

References 71 publications

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“…Xu et al (2015) observe significantly lower capital cost in firms with stronger CSR scores. They indicate that such scores yield greater cost of capital benefit for non-SOEs.…”

Section: Sample Selection and Data Collectionmentioning

confidence: 74%

The role of board gender and foreign ownership in the CSR performance of Chinese listed firms

McGuinness

Vieito

Wang

2017

Journal of Corporate Finance

688

473

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China's recent promotion of Corporate Social Responsibility (CSR) has coincided with a marked increase in the number of Chinese listed firms attracting female board members and foreign equity investors. Using Rankins' (RKS) ratings over the 2009 to 2013 period, we show that greater gender balance in top-management supports stronger CSR performance. This finding broadens gender-based accounts emphasizing social networks (Westphal and Milton, 2000), Critical Mass Theory (Kramer et al., 2006;Bear et al., 2010;and Soares et al., 2011) and team dynamics (Woolley et al., 2010;and Hoogendoorn et al., 2013). Findings also reveal stronger CSR performance in firms with a female CEO. Female leadership thus appears to be just as important as gender mix in driving CSR change.CSR ratings are also increasing in foreign ownership levels. We examine whether a political-networking motivation underlies foreign investment (Du and Girma, 2010;Liu et al., 2014a;Lin et al., 2015;and Jiang and Kim, 2015). We argue that qualified foreign institutional investors (QFIIs) deploy socialengagement in non-SOEs to build competitive advantage. But in SOEs, where strong political networks already exist, QFIIs have less incentive to boost CSR ratings. However, results indicate little difference in the social ratings of QFII-invested SOEs and non-SOEs.Additionally, we confirm the Barnea and Rubin (2010) contention of an inversion in social ratings at entrenched managerial ownership levels. Non-linear rating effects also emerge in relation to state ownership (Li et al., 2013). Finally, CSR performance exhibits positive (negative) relation with a listed entity's size and age (leverage and lagged return-on-equity) but virtually no connection with independent board representation.

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“…Xu et al (2015) observe significantly lower capital cost in firms with stronger CSR scores. They indicate that such scores yield greater cost of capital benefit for non-SOEs.…”

Section: Sample Selection and Data Collectionmentioning

confidence: 74%

The role of board gender and foreign ownership in the CSR performance of Chinese listed firms

McGuinness

Vieito

Wang

2017

Journal of Corporate Finance

688

473

View full text Add to dashboard Cite

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“…In turn, the increase in the number of long‐term investors could lead to a reduction in the cost of equity capital. In this regard, several studies have verified the negative relationship between the implementation of sustainable practices and the cost of equity capital (El Ghoul, Guedhami, Kwok, & Mishra, ; Wu, Lin, & Wu, ; Xu, Liu, & Huang, ). In this perspective, our study extends these results to integrated thinking and the consequent publication of a high‐quality integrated report.…”

Section: Discussionmentioning

confidence: 96%

The impact on the cost of equity capital in the effects of integrated reporting quality

et al. 2019

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Integrated reporting is a new reporting tool that includes financial and nonfinancial information, which represents a natural evolution of the corporate reporting movement. Although this practice has gained increasing attention in recent years, both from an academic and professional perspective, the quality of the reports still represents a critical aspect due to inadequate investigation. Only a few studies have focused on integrated reporting quality, and contributions on the effects of quality have been even rarer. This study aims to investigate on the impact of integrated reporting quality on the firm's cost of equity capital, owing to the paramount importance of this parameter for firms and investors. Our results highlight that integrated reporting quality has a significantly negative association with the cost of equity capital, suggesting that integrated reporting quality represents an innovative way to reduce the cost of equity. To our knowledge, this is the first study that examines the relationship between integrated reporting quality and a firm's cost of equity.

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“…The evolution of CSR in China is largely driven by the government because of its overwhelming impact on the nation's economy (Xu, Liu, & Huang, 2015). Although CSR is traditionally considered beyond the reach of the requirements of government or the law, in China, the government is the key player in CSR (Moon & Shen, 2010).…”

Section: Csr In Chinamentioning

confidence: 99%

Corporate social responsibility and financial performance: The roles of government intervention and market competition

Long

et al. 2019

Corp Soc Responsibility Env

151

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Incorporating instrumental and political views of corporate social responsibility (CSR), this study examines the relationship between CSR and corporate financial performance in China's unique institutional context, which is featured by the coexistence of a strong government and a transitional market economy. Our results show that (a) CSR positively affects financial performance, (b) state ownership weakens the relationship between CSR and financial performance, and (c) industry competition strengthens the relationship between CSR and financial performance for both state‐owned and non‐state‐owned firms. This study reveals that, although both an instrumental view and a political view of CSR are applicable in China, the motivation to create economic benefits for firms dominates, and market competition increases the strategic use of CSR.

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Corporate social responsibility, the cost of equity capital and ownership structure: An analysis of Chinese listed firms

Cited by 106 publications

References 71 publications

The role of board gender and foreign ownership in the CSR performance of Chinese listed firms

The role of board gender and foreign ownership in the CSR performance of Chinese listed firms

The impact on the cost of equity capital in the effects of integrated reporting quality

Corporate social responsibility and financial performance: The roles of government intervention and market competition

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