Integrating corporate social and corporate political strategies: Performance implications and institutional contingencies in China

Du, Jialin; Bai, Tao; Chen, Stephen

doi:10.1016/j.jbusres.2019.02.014

Cited by 57 publications

(34 citation statements)

References 102 publications

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“…Second, since there are several ways to calculate the Tobin Q, we used four different Tobin Q values (the definitions are shown in Table A4) calculated by CSMAR (China Stock Market and Accounting Research) as the independent variable. The CSMAR is also a primary source for financial and non-financial data of Chinese listed companies and used in previous study [54,55,64]. The results shown in Tables A5-A7 are largely consistent with the main results. Third, as there is always the problem of endogeneity in financial studies, we addressed this concern by controlling the firm fixed effects.…”

Section: Robustness Analysissupporting

confidence: 80%

“…Research on the relationship between the CSR of Chinese SOEs and their value has also been carried out [54,55]. Wang et al [54] found that the Chinese politically embedded firms show better CSR performance than non-politically embedded firms.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…However, the CSR performance of politically embedded firms is more negatively related to financial performance than that of firms without political embeddedness. Du et al [55] show that CSR and corporate political activities have a positive joint effect on firms' financial performance. Additionally, when the government involvement is high, the positive effect is stronger.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

See 2 more Smart Citations

Does CSR Signal the Firm Value? Evidence from China

Bing

2019

Sustainability

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Compared to the rapid development of Corporate Social Responsibility (CSR) practices in developing countries, especially in China, the research about the effect of CSR on firm value has evolved more slowly. This paper examines the relationship between CSR and firm value used by listed Chinese companies from 2010 to 2017. The results for the whole sample show CSR significantly reduces firm value. Additionally, there are no significant differences for the effect of CSR on firm value between state owned enterprises (SOEs) and non-SOEs or sensitive industry and non-sensitive industry. To explore whether the relationship changes over time, we divided the period into two sub-periods. During 2010–2014, the results are similar with those obtained by the whole sample. However, the results significantly change during 2015–2017. Specifically, the negative and significant relationship between CSR and firm value becomes non-significant in the second sub-period. Compared to the weakening effect of CSR for non-SOEs on firm value, CSR for SOEs alleviates the effect, and CSR of SOEs increases firm value significantly. Similar results are obtained for non-sensitive industry and sensitive industry. The changes are the result of increasing awareness by government, companies, and investors on sustainable development after 2015. This finding enriches the research on the dynamic effect of CSR on firm value in developing countries.

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Section: Robustness Analysissupporting

confidence: 80%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Section: Literature Review and Hypothesesmentioning

confidence: 99%

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Does CSR Signal the Firm Value? Evidence from China

Bing

2019

Sustainability

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“…The studies suggest that institutional factors and pressure such as government regulations, the legal system, national culture, and corporate governance significantly influence the firm's CSR policies. However, the institutional pressure put on firms is not homogenous due to many factors such as political resources [24], public policies [25], Guanxi (relationship) [26,27], a high level of government involvement [26,27], geographical remoteness [28], and formal and informal institutional environments [28,29].…”

Section: Introductionmentioning

confidence: 99%

Sub-National Institutional Contingencies and Corporate Social Responsibility Performance: Evidence from China

et al. 2019

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This study investigates the relationship between sub-national institutional contingencies and corporate social responsibility performance (CSRP). Sub-national institutional contingencies (SNICs) play a moderating role in the link between CSRP and corporate financial performance (CFP). Using data from all A-share Chinese companies listed on the Shenzhen and Shanghai exchanges for the period 2010 to 2015, ordinary least square (OLS) regression was used as a baseline methodology to draw inferences from the data. The study uses propensity score matching (PSM) to confirm the robustness and to tackle the possible issue of endogeneity. We find reliable evidence that SNICs have a positive and significant effect on CSRP. This positive relationship is more pronounced in cross-listed companies as compared to state-owned enterprises (SOEs) and in companies located in the more developed region. Moreover, SNICs moderate the positive relationship between CSRP and CFP. The relationship is stronger in firms that are non-SOEs, are non-cross-listed, and are from less-developed regions as compared to their counterparts. The findings provide implications for regulators and individual companies. Investment in corporate social responsibility (CSR) helps companies to achieve their primary objective (i.e., financial performance). With respect to practical implications, the study indicates that policymakers, executives, and managers should refrain from “one size fits all” CSR policies. Instead, they need to simultaneously evaluate the effects of regional development, cross-listing, and ownership characteristics. Considering weak social performance by firms that are from less developed regions, are non-cross-listed, and that are non-SOEs, policymakers and the government should improve information transparency and the regulatory framework, and provide these firms with incentives. This study also provides insights for other emerging economies, especially those going through extraordinary government interventions.

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“…In more developed regions, the government exerts less control over local resource allocation (Du et al, 2019;Xiao & Park, 2018) and product and factor markets are better developed, which lower the costs of resource acquisition and subsequent economic transactions (Dau & Cuervo-Cazurra, 2014). These regions also tend to have built better infrastructures, such as highways, airports, and ports (Song & van Geenhuizen, 2014).…”

Section: Moderating Roles Of Institutional Developmentmentioning

confidence: 99%