The impact of financial flexibility and directors’ academic experience on corporate R&amp;D investments: a quantile regression approach

Feng, Chai Bin; Mirza, Sultan Sikandar; Ahsan, Tanveer; Gull, Ammar Ali

doi:10.1080/00036846.2021.1983145

Cited by 11 publications

(4 citation statements)

References 29 publications

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“…This would affect strategic decisions such as firm-level digitalization. Therefore, debt flexibility can be considered as a significant firm-level control variable, and we gather data on debt flexibility from the WIND database (Feng et al. , 2022).…”

Section: Methodsmentioning

confidence: 99%

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: Methodsmentioning

confidence: 99%

The impact of digitalization on CSR disclosure: a governance perspective

Jin,

Mirza

2023

JEIM

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“…The region with a higher than the median market index of the firm's registered place is regarded as the region group with a higher degree of marketisation; otherwise, it is regarded as the region group with a lower degree of marketisation (Hou et al, 2021). of the firm's reserves play a more significant role in the improvement of corporate value (Feng et al, 2022). Furthermore, Table 12 demonstrates that INST in firms in regions with a high degree of marketisation pay more attention to the firms' overall interests, so they have a less significant negative moderating role in the relationship between CSR and corporate value (Wang et al, 2023).…”

Section: The Marketisation Level Heterogeneity Analysismentioning

confidence: 99%

Revisiting the nexus between corporate social responsibility and corporate value: Evidence from China

Wu,

Liew

2023

Corp Soc Responsibility Env

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PurposeUnder the concept of sustainable development guided by ‘carbon peak’ and ‘carbon neutral’, corporate social responsibility (CSR) performance has become the focus of attention in all sectors of society. With the gradual deepening of China's ‘new economic normal’ development, firms face increasing environmental uncertainty in the market. This study aims to embed CSR, financial flexibility (FF), institutional investors (INST), and corporate value into the same theoretical framework and conduct heterogeneity analysis on the nature of property rights, heavily polluting industries, and marketisation level.Design/Methodology/ApproachBased upon the observation data of listed firms in Shanghai and Shenzhen A‐shares in China from 2011 to 2021, this study uses Stata software for data processing, analysis, and two‐stage least‐squares (2SLS) models to solve endogenous problems.FindingsThe research results show that improving CSR performance increases corporate value, while INST and FF moderate the relationship between them. Further heterogeneity analysis found that the nature of property rights, heavily polluting industries, and marketisation level have different impacts on these moderating effects. This result provides ideas for clarifying the economic impact of enhancing the firms' CSR performance in the current era.Originality/ValueFirst, from the standpoint of CSR performance, it enhances the literature on the key corporate values in China. Second, from the perspective of corporate value, it has enriched the CSR literature and provided a new perspective for further clarifying the significance of improving the CSR performance of firms at this stage. Third, from the perspective of INST and FF, this research examines the moderating mechanism of CSR performance on corporate value. Hence, it provides a reference for further improving the efficiency of resource allocation in the capital markets.

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“…In particular, the corporate sector has become China's primary source of economic development, optimizing the industrial structure and enhancing human capital development. By 2019, the number of private firms in China reached more than 20 million, highlighting the significant growth of China's corporate sector and capturing the attention of many scholars (Casalin et al, 2017; Feng et al, 2022; Liu & Atuahene‐Gima, 2018; Zhang et al, 2020). The enormous growth of China's corporate sector has intensified competition in the product market, and in a competitive market, customers and suppliers play a central role in a firm's supply chain management (SCM) (Casalin et al, 2017; Lii & Kuo, 2016; Zhang et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

How to deal with customer and supplier concentration to attain sustainable financial growth? The role of business strategy

Ahsan

Mirza²,

Gull

et al. 2023

Bus Strat Env

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For effective supply chain management, firms should focus on the relationship with their immediate stakeholders in the supply chain, namely, suppliers (upstream) and customers (downstream). This study investigates the impact of customer and supplier concentration as well as business strategy on sustainable financial growth, using financial data of 2021 Chinese non‐financial firms listed from 2006 to 2020. Additionally, it explores the moderating effect of business strategy on the relationship between customer and supplier concentration and sustainable financial growth. We find that higher customer and supplier concentration weakens the bargaining power of Chinese firms, which reduces their financial growth. However, an appropriate business strategy can help such firms achieve sustainable financial growth. We find that an aggressive business strategy moderates the negative impact of supplier concentration, while a defensive business strategy moderates the negative impact of customer concentration on financial growth. Finally, our results for the direct impact of customer and supplier concentration as well as business strategy hold for state‐owned and non‐state‐owned firms. However, we find differences regarding the moderating impact of business strategy between state‐owned and non‐state‐owned firms. Our results are robust to time and industry fixed effects, alternate proxies of financial growth and regression techniques.

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The impact of financial flexibility and directors’ academic experience on corporate R&D investments: a quantile regression approach

Cited by 11 publications

References 29 publications

The impact of digitalization on CSR disclosure: a governance perspective

The impact of digitalization on CSR disclosure: a governance perspective

Revisiting the nexus between corporate social responsibility and corporate value: Evidence from China

How to deal with customer and supplier concentration to attain sustainable financial growth? The role of business strategy

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