The disclosure of corporate social responsibility reports and sales performance in China

Abstract

Based on legitimacy and stakeholder theory, we investigate whether there is an association between the disclosure of corporate social responsibility reports and a firm's sales performance in China. The empirical results reveal that the return on sales and sales growth are positively associated with the level of corporate social responsibility reporting in China. This positive association is strengthened when firms have concentrated customers. Firms use corporate social responsibility reports to improve sales performance and attract customers, who are one of their major stakeholders, and retain their legitimacy.

Lie of the weak: Inconsistent corporate social responsibility activities of Chinese zombie firms

“…The dependent binary variable CSR_R has mean 0.286 indicating 28.6% of observations in our sample disclosed CSR reports. This is basically consistent with other Chinese CSRD studies (Yu and Zheng, 2018), indicating that Chinese companies' CSR reports are still at a low level (Liao et al, 2017). This ratio is also much lower than the 41.4% observed in some US studies (Holder-Webb et al, 2009).…”

“…CSRD_S is an overall rating of CSRD activities, which is obtained from the third party RKS (Marquis and Qian, 2013). Just as KLD is widely used in United States research (Dhaliwal et al, 2011;Tran and O'Sullivan, 2018), RKS is widely used in CSRD research in China (Fassin, 2005;Luo et al, 2019;Wang et al, 2018;Yu and Zheng, 2018). RKS has set four zero-level indicators in terms of macrocosm, content, technique, and industry (MCTI) 5 .…”

Do CSR Ratings Converge in China? A Comparison Between RKS and Hexun Scores

“…However, research is lacking on the validity of measuring CSR performance and disclosure quality, as well as the convergent validity between these scores. In this paper, a comparative and quantitative analysis was performed for the period 2010-2017, and the following results were obtained: (1) Based on a comparison of the rating methods, information sources, and other factors, RKS is more suitable for measuring the CSR disclosure quality, while Hexun is more suitable for measuring the CSR performance; (2) based on a Spearman correlation analysis, the convergent validity between these two scores is very low, particularly after 2013; and (3) the sub-indicator weights of the RKS system always maintain a high stability, whereas those of the Hexun system suffer from severe fluctuations starting in 2013.Sustainability 2019, 11, 3921 2 of 20 mechanisms of economic consequences [20][21][22][23], the drivers of CSR performance [24][25][26][27][28][29], and economic consequences [30][31][32][33][34][35]; and (2) the HX score is used only as a proxy for the CSR performance level, such as in research on the drivers of CSR performance [36][37][38][39][40] and the economic consequences of CSR performance [19,33,[41][42][43]. Some studies even use the level-1 sub-indicator of the HX score, the environmental dimension HXE, to score a firm's environmental performance level [44,45].Sustainability 2019, 11, x FOR PEER REVIEW 2 of 21 also for CSR performance levels, such as in research on the drivers of CSR disclosure quality [16][17][18][19], the mechanisms of economic consequences [20][21]…”

“…Sustainability 2019, 11, x FOR PEER REVIEW 2 of 21 also for CSR performance levels, such as in research on the drivers of CSR disclosure quality [16][17][18][19], the mechanisms of economic consequences [20][21][22][23], the drivers of CSR performance [24][25][26][27][28][29], and economic consequences [30][31][32][33][34][35]; and (2) the HX score is used only as a proxy for the CSR performance level, such as in research on the drivers of CSR performance [36][37][38][39][40] and the economic consequences of CSR performance [19,33,[41][42][43]. Some studies even use the level-1 sub-indicator of the HX score, the environmental dimension HXE, to score a firm's environmental performance level [44,45].…”

Analysis of corporate social disclosures of the apparel industry following crisis: an institutional approach

“…Our research contributes to the social and environmental accounting literature. A significant number of current studies apply legitimacy theory (Negre et al ., 2017; Adler et al ., 2018; Muttakin et al ., 2018; Blanc et al ., 2019) and other theoretical perspectives – such as stakeholder theory (Lu and Abeysekera, 2017; Yu and Zheng, 2020) and reputation risk management perspective (Bebbington et al ., 2008; Arora and Lodhia, 2017) – to examine social and environmental disclosures. However, there have been calls for greater study of the contextual factors in both developed and developing countries that influence organisational disclosure practices (Belal et al ., 2013).…”