Minority shareholder activism and corporate social responsibility

Xu, Shen; Yin, Bichao; Lou, Chunjie

doi:10.1016/j.econmod.2022.106045

Cited by 19 publications

(15 citation statements)

References 90 publications

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“…Higher internal control weakens the negative effect of digitalization on CSR disclosure, especially in SOEs, which implies that internal control can improve the quality and reliability of CSR information and reduce the opportunistic behavior of managers (Lisic et al, 2016). Higher minority shareholders' pressure intensifies the negative effect of digitalization on CSR disclosure, which may be due to information asymmetry and "free-rider"" problems that prevent minority shareholders from monitoring and influencing managers' decisions (Xu et al, 2022). The paper also examines the industry heterogeneity and the sub-categories of CSR disclosure and reports different moderating effects in different dimensions and groups, which offer directions for future research.…”

Section: Discussionmentioning

confidence: 99%

“…As one of the key participants in the Chinese market, minority shareholders play a crucial role in external supervision. The aforementioned information effect and governance effect enable minority shareholders to actively oversee the management decision-makings and avoid short-term oriented and socially irresponsible practices (Xu et al. , 2022).…”

Section: Methodsmentioning

confidence: 99%

“…More active shareholders are likely to encourage greater internal information disclosure and elicit responses from firms (Uysal et al, 2018). However, an increase in the number of minority shareholders may lead to the "free rider" issue, making it more challenging to mobilize shareholders for voting or to reach a consensus on key issues (Xu et al, 2022). Nevertheless, as more shareholders participate in corporate internal decision-Impact of digitalization on CSR disclosure making, a broader range of interests and perspectives would be represented on the board, potentially enhancing the effectiveness of external governance.…”

Section: Literature Review and Hypotheses Development 21 Corporate Di...mentioning

confidence: 99%

“…However, studies also suggest that due to the serious agency issue and free-rider problem in China, it is also possible that minority shareholders regard short-term performance as the major indicator of management capacity and firm value, thereby driving the management to focus on stock price and temporary benefits, which is counterproductive to either innovation in digital technologies, or CSR practices (Kong, 2013;Feng et al, 2021). To investigate the true nature of minority shareholders in China, we introduce pressures from minority shareholders as the third moderator and measure it by the natural logarithm of the total number of minority shareholders (Xu et al, 2022).…”

Section: (A) Management Power (Pow)mentioning

confidence: 99%

“…, 2018). However, an increase in the number of minority shareholders may lead to the “free rider” issue, making it more challenging to mobilize shareholders for voting or to reach a consensus on key issues (Xu et al. , 2022).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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The impact of digitalization on CSR disclosure: a governance perspective

Jin,

Mirza

2023

JEIM

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PurposeDigitalization is increasingly important for promoting authentic CSR practices. Firms with higher CSR levels motivate their employees to pursue their goals and demonstrate their social responsibility. However, the literature has not adequately examined how firm-level digitalization influences corporate sustainability from a governance perspective. This study aims to fill this gap by exploring how digitalization affects CSR disclosure, a key aspect of sustainability, at the firm level. Furthermore, this study also aims to investigate how governance factors, such as management power, internal control and minority shareholder pressure, moderate this effect.Design/methodology/approachThis study employs a fixed effect model with robust standard errors to analyze how digitalization and CSR disclosure are related and how this relationship is moderated by governance heterogeneity among Chinese A-share companies from 2010 to 2020. The sample consists of 2,339 firms, of which 360 are SOEs and 1,979 are non-SOEs. To ensure robustness, this study has excluded the observations in 2020 to avoid the effects of COVID-19 and used an alternative measure of CSR disclosure based on the HEXUN CSR disclosure index. Furthermore, this study also explores the link in various corporate-level CSR settings.FindingsThe regression findings reveal that: First, Chinese A-share firms with higher digitalization levels disclose less CSR information. This finding holds for both SOEs and non-SOEs. Second, stronger management power has a negative moderating effect that weakens the link between digitalization and CSR disclosure, and this effect is mainly driven by SOEs. Third, internal control attenuates the negative association between firm digitalization and CSR disclosure, which is more pronounced in SOEs. Finally, minority shareholders exacerbate the negative relationship between digitalization and CSR disclosure, and this effect is more evident in non-SOEs. These results are robust to excluding the potential COVID effect and using an alternative HEXUN CSR disclosure index measure.Originality/valueDigitalization and sustainability have been widely discussed at a macro level, but their relationship at a micro level has been largely overlooked. Moreover, there is hardly any evidence on how governance heterogeneity affects this relationship in emerging economies, especially China. This paper addresses these issues by providing empirical evidence on how digital transformation influences CSR disclosure in China, a context where digitalization and CSR are both rapidly evolving. The paper also offers implications for both practitioners and policymakers to design appropriate digital strategies for firm development from diverse business perspectives.

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Section: Discussionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Literature Review and Hypotheses Development 21 Corporate Di...mentioning

confidence: 99%

Section: (A) Management Power (Pow)mentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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The impact of digitalization on CSR disclosure: a governance perspective

Jin,

Mirza

2023

JEIM

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Directors' and officers' liability insurance and minority shareholders' participation in corporate governance

Zhang,

Yang,

Huo

2024

Int. J Fin Econ

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This study empirically investigates the influence of directors' and officers' liability insurance (D&O insurance) on minority shareholders' participation in corporate governance. Using a sample from Chinese A‐share listed companies between 2011 and 2018, we find that D&O insurance can significantly decrease the participation of minority shareholders, and this conclusion remains valid after robustness checks. The mechanism analysis demonstrates that D&O insurance plays a positive role in diminishing minority shareholders' participation through the enhancement of firm performance. Further analyses suggest that the negative association between D&O insurance and minority shareholders' participation is more pronounced in firms with weaker corporate governance practices. These findings provide evidence for the supervisory governance role of D&O insurance, suggesting China should consider encouraging listed companies to purchase D&O insurance for the protection of minority shareholders.

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Does minority shareholder activism impede corporate default risk? Evidence from China

Huang,

Wang

2024

Finance Research Letters

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Minority shareholder activism and corporate social responsibility

Cited by 19 publications

References 90 publications

The impact of digitalization on CSR disclosure: a governance perspective

The impact of digitalization on CSR disclosure: a governance perspective

Directors' and officers' liability insurance and minority shareholders' participation in corporate governance

Does minority shareholder activism impede corporate default risk? Evidence from China

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