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Does corporate social responsibility reduce share price premium? Evidence from China's A- and H-shares

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  • Deng, Lu
  • Liao, Mingqing
  • Luo, Rui
  • Sun, Jianfei
  • Xu, Chen

Abstract

We examine the effect of corporate social responsibility (CSR) on stock price premiums between firms' two share classes, A- and H-shares, in China. For Chinese companies which are listed both in Hong Kong as H-shares and at the same time in Shanghai or Shenzhen as A-shares, significant stock price premiums (AH-share premiums) are documented for A-shares. Using a sample of Chinese listed firms, we find that AH-share premium is significantly lower for firms issuing CSR reports. We also examine the relation between the quality of CSR disclosure and AH-share premium and find that higher CSR disclosure quality is associated with lower AH-share premium. Further investigation suggests that the negative relation between CSR disclosure (quality) and AH-share premium is due to the information asymmetry reduction resulting from (high-quality) CSR disclosure.

Suggested Citation

  • Deng, Lu & Liao, Mingqing & Luo, Rui & Sun, Jianfei & Xu, Chen, 2021. "Does corporate social responsibility reduce share price premium? Evidence from China's A- and H-shares," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:pacfin:v:67:y:2021:i:c:s0927538x21000767
    DOI: 10.1016/j.pacfin.2021.101569
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    3. Kong, Xiaoran & Zhang, Xueying & Yan, Cheng & Ho, Kung-Cheng, 2022. "China's historical imperial examination system and corporate social responsibility," Pacific-Basin Finance Journal, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    CSR; Information asymmetry; Segmentation;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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