Is corporate social responsibility constrained by bank credit resource allocation?

Abstract

Credit rationing theory suggests that the impact of bank credit allocation on corporate social responsibility (CSR) has the dual effect of adverse selection and moral hazard. In this study, the impact of credit allocation on CSR and its mechanisms are explored in the context of credit rationing theory based on Chinese listed companies from 2010 to 2019. The results show that the impact of bank credit allocation on CSR exhibits an inverted U-shaped correlation, and there is a critical point (17.9134) at which the increase in credit allocation will promote the level of CSR until the critical point is exceeded, after which the level of CSR will gradually decrease. Credit allocation can influence CSR through information asymmetry (stock price informativeness, analyst tracking) and managerial overconfidence, respectively. Companies with overconfident managers and low transparency in non-socially responsible weighting systems are more likely to have an inverted U-shaped relationship between bank credit allocation and CSR. This study provides new empirical evidence to understand the impact of credit allocation on CSR and expands the theory of credit rationing to a certain extent, thereby providing a reference for CSR maximization.

Environmental Protection Fee-to-Tax and Corporate Environmental Social Responsibility: A Test Based on Corporate Life Cycle Theory

“…One branch is corporate social responsibility-related research. The existing literature focuses on government policies, internal governance, and external regulation, mainly on social security policies [13], tax expenditures [14], political connections [15,16], corporate governance and executive incentives [17,18], disclosure regulation [19], credit allocation [20], and other aspects. These studies provide useful theoretical guidance and empirical experience for us to understand the institutional construction and driving mechanism of corporate social responsibility.…”

Does consumer social responsibility augment corporate social responsibility: A reciprocal analysis of external stakeholder from stakeholder theory perspective

“…Since the research work on CSR practices is massively growing where different scholars have advocated the importance by affirming the positive nexus of CSR for business success (Chen & Zeng, 2022; Choi & Zhang, 2011; Laroche et al, 2001; Lyu et al, 2018). Van der Heijden et al (2003) stated, understanding the behavior of the consumers may assist the firms' efforts to effectively sell the services or products.…”