The social, environmental and ethical performance of Chinese companies: Evidence from the Shanghai Stock Exchange

Abstract

We investigate the social performance of Chinese listed non-financial companies in the Shanghai Stock Exchange. We design a comprehensive social, environment and ethics disclosure index (CSPDI) and assess the bi-directional relationship between corporate social performance and financial performance using the three-stage least squares (3SLS). We find that the mean value of CSPDI is 53% and high social disclosure is associated more with environmentally sensitive industries. Moreover, the index results show that little attention has been paid to ethical issues. Interestingly, we find that the better the financial performance, the worse the corporate social performance disclosure. This result is consistent with the managerial opportunism hypothesis. Finally, the results of the 3SLS estimation show that the causality between the two endogenous variables runs from financial performance to the corporate social performance. This suggests that the corporate social performance is determined by financial performance.

The IPO corporate social responsibility information disclosure: Does the stock market care?

“…(), Farag et al . (), Halbritter and Dorfleitner (), and Dutordoir et al . () and construct scoring criteria for these indicators, as presented in Table .…”

“…For instance, Farag et al . () investigate Chinese listed firms’ CSR performance by collecting data from annual reports, CSR reports, and websites. They design a disclosure index to measure social, ethical, and environmental performance based on the Guidelines on Listed Companies’ Environmental Information Disclosure issued by the Shanghai Stock Exchange in 2008 and the China Corporate Social Responsibility Reporting Guidelines released by the Chinese Academy of Social Sciences in 2009.…”

Analyzing the Effect of Corporate Environmental Performance on Corporate Financial Performance in Developed and Developing Countries

“…Nowadays, doing business is not limited to producing and selling products to customers, and firms must take care of stakeholders' interests. The business model followed by a firm must include aspects that compose a current relevant business process usually known as Corporate Social Responsibility (CSR), as important as any other business process such as operations, finances or sales [3]. CSR can be seen as a duty than only implies costs and efforts for firms (neoclassical view), without any reward or benefit for business [1], but it can also be seen as a business engine or tool to make profits and improve firms' performance, as stated in the stakeholders view [2] or natural resources view [4].…”

Critical Factors Influencing the Evolution of Companies’ Environmental Behavior: An Agent-Based Computational Economic Approach

“…Companies' environmental behaviors are shown to be influenced by internal factors (Fürst & Oberhofer, 2012;Montalvo, 2008;Wirth, Kulczycka, Hausner, & Koński, 2016), including ownership, size (Shvarts, Pakhalov, & Knizhnikov, 2016;Teles, Ribeiro, Tinoco, & Caten, 2015), and financial ability (Farag, Meng, & Mallin, 2015).…”