Do Credible Firms Perform Better in Emerging Markets? Evidence from China

Zhang, Ran; Rezaee, Zabihollah

doi:10.1007/s10551-009-0038-8

Cited by 55 publications

(34 citation statements)

References 66 publications

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“…This finding is supported by another study which shows that CSR performance is negatively associated with the degree of information asymmetry (Cho et al, 2013). Another stream of CSR studies finds that (1) the CSR activities improve firm performance in the debt market (Menz, 2010); (2) more socially responsible firms perform better in emerging markets (Zhang and Rezaee, 2009); and (3) CSR reduces firms' systematic risk (Park et al, 2013).…”

Section: The Relation Between Csr and Financial Performancementioning

confidence: 85%

Corporate Social Responsibility and Financial Performance: The impact of the MSCI ESG Ratings on Korean Firms

Kim¹,

Chung²,

Park³

2013

Journal of the Korea Academia-Industrial cooperation Society

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This study investigates how the Corporate Social Responsibility (CSR) performance of a firm is associated with its financial performance in the stock market. Prior studies provide mixed evidence on the relation between CSR and financial performance. This study sheds some lights on the positive effect of CSR on firms' financial performance. Using a unique set of data on CSR performance of Korean firms provided by Morgan Stanley Capital International (MCSI), we find that firms' CSR performance is positively associated with their contemporaneous stock returns and Tobin's Q in the Korean market. This finding suggests that stock market participants value firms' CSR activities. This is the first study that provides empirical evidence on the existence of the positive association between the CSR performance of Korean firms and their financial performance using MCSI data which is considered more reliable than the data used in the prior CSR studies in Korea. 요 약본 논문은 기업의 사회적 책임이 재무성과에 영향을 미치는지를 고찰하였다. 선행연구들은 지금까지 일관적 이지 않은 결과를 보여주었으며, 본 연구는 기업의 사회책임이 기업의 재무성과에 긍정적인 영향을 미친다는 것을 발 견하였다. 모건스탠리에서 발간되는 한국기업의 사회적 책임 성과평가 자료를 분석한 결과, 기업의 사회적 책임과 자 본시장에서의 재무성과 간에 양의 상관관계가 있음을 발견하였다. 구체적으로 회귀분석의 결과 기업의 사회책임 평가 가 한 단계 높으면 주가수익률이 평균 3.4% 정도 높은 것으로 나타났다. 본 연구의 결과는 다른 나라의 자료를 토대 로 하는 선행연구의 결과를 지지하며, 한국기업의 사회적 책임에 대한 체계적이고 분석적인 평가 결과를 제공하였다 는 데에 의의가 있다.

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Section: The Relation Between Csr and Financial Performancementioning

confidence: 85%

Corporate Social Responsibility and Financial Performance: The impact of the MSCI ESG Ratings on Korean Firms

Kim¹,

Chung²,

Park³

2013

Journal of the Korea Academia-Industrial cooperation Society

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“…Second, Griffin and Mahon (1997) argue that multiple measures of financial performance should be used. Zhang and Rezaee (2009) adopt three proxies of financial performance: ROE, net profit margin, and sales growth. Cheung et al (2010) measure the market valuation of firms as Tobin's Q and market-to-book ratio (MTBR).…”

Section: Robustness Testsmentioning

confidence: 99%

Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence from China

2010

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“…Friedman (1970) claims that firms' actions in accord with social responsibility may reduce returns to their stockholders; however, the stakeholder theory argues that CSR can improve financial performance since the success of a firm depends on the extent to which it satisfies the key stakeholders' expectations. The literature on the link between corporate social performance (CSP) and corporate financial performance (CFP) provides mixed results (Margolis and Walsh 2003;Orlitzky et al 2003;Ullmann 1985, Zhang andRezaee 2009). Although the majority of the studies surveyed in Beurden and Gossling (2008) and Margolis and Walsh (2003) document a positive relationship between CSP and CFP, the 13 studies reviewed by Ullmann (1985) do not find clear evidence of positive CSP-CFP link.…”

Section: Introductionmentioning

confidence: 99%

Do Lenders Value Corporate Social Responsibility? Evidence from China

2011

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Drawing on risk mitigation theory, this article examines whether the improvement of firms' social performance reduces debt financing costs (CDFs) in China, the world's largest emerging market. Employing both the ordinary least square (OLS) and the two-stage instrumental variable regression methods, we find that improved corporate social responsibility (CSR) reduces the CDF when firms' CSR investment is lower than an optimal level; however, this relationship is reversed after the CSR investment exceeds the optimal level. Firms with extremely low or extremely high CSR are subject to a higher CDF. The results also suggest that the optimal CSR level for small firms is higher than that for large firms. This study is the first to document a U-shaped relationship between CSR and CDF and also the first to investigate this relationship within an emerging market context.

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Do Credible Firms Perform Better in Emerging Markets? Evidence from China

Abstract: corporate credibility, corporate reputation, emerging markets, financial performance, market value,

Cited by 55 publications

References 66 publications

Corporate Social Responsibility and Financial Performance: The impact of the MSCI ESG Ratings on Korean Firms

Corporate Social Responsibility and Financial Performance: The impact of the MSCI ESG Ratings on Korean Firms

Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence from China

Do Lenders Value Corporate Social Responsibility? Evidence from China

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