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Does Firm Performance Influence Corporate Social Responsibility Reporting of Chinese Listed Companies?

Author

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  • Muhammad Safdar Sial

    () (School of Economics and Management of Wuhan University, Wuhan 430072, China)

  • Chunmei Zheng

    () (School of Economics and Management of Wuhan University, Wuhan 430072, China)

  • Nguyen Vinh Khuong

    () (Faculty of Accounting and Auditing, University of Economics and Law, Viet Nam National University, Ho Chi Minh City 700000, Vietnam)

  • Tehmina Khan

    () (School of Accounting, RMIT University, Melbourne 3000, Australia)

  • Muhammad Usman

    () (School of Management, Xi’an Jiaotong University, Xi’an 710049, China)

Abstract

This study aims to investigate whether firm performance influences corporate social responsibility reporting of Chinese listed companies. We have used the sample of all A-share listed firms on Shenzhen and Shanghai stock exchanges for the period 2008 to 2015. The authors used pooled ordinary least squares (OLS) regression as a baseline methodology. To control the possible problem of endogeneity we use one year lagged and two-stage least squares regression. We find that firm performance has a statistically significant impact on CSR reporting. Moreover, we see that firms with high performance are more likely to report CSR activities than low-performance firms. Additionally, five of the control variables (board size, CEO power, SOE, firm size, and Big4) have some influence on CSR reporting. These findings hold for a set of robustness tests. Our results have implications for the development of CSR reporting in developing countries like China. Our research suggests that, in China, companies with better financial performance undertake more CSR reporting. The paper contributes to the existing literature by investigating the effect of firm performance on CSR reporting of Chinese listed companies. Additionally, this paper enriches the current literature on CSR reporting and highlights the importance of a firm’s financial performance for better environmental performance and reporting.

Suggested Citation

  • Muhammad Safdar Sial & Chunmei Zheng & Nguyen Vinh Khuong & Tehmina Khan & Muhammad Usman, 2018. "Does Firm Performance Influence Corporate Social Responsibility Reporting of Chinese Listed Companies?," Sustainability, MDPI, Open Access Journal, vol. 10(7), pages 1-12, June.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2217-:d:155014
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Yiming Zhuang & Xinyue Chang & Younggeun Lee, 2018. "Board Composition and Corporate Social Responsibility Performance: Evidence from Chinese Public Firms," Sustainability, MDPI, Open Access Journal, vol. 10(8), pages 1-12, August.
    2. M.A. Gulzar & Jacob Cherian & Muhammad Safdar Sial & Alina Badulescu & Phung Anh Thu & Daniel Badulescu & Nguyen Vinh Khuong, 2018. "Does Corporate Social Responsibility Influence Corporate Tax Avoidance of Chinese Listed Companies?," Sustainability, MDPI, Open Access Journal, vol. 10(12), pages 1-12, December.
    3. María del Mar Miras-Rodríguez & Domingo Martínez-Martínez & Bernabé Escobar-Pérez, 2018. "Which Corporate Governance Mechanisms Drive CSR Disclosure Practices in Emerging Countries?," Sustainability, MDPI, Open Access Journal, vol. 11(1), pages 1-20, December.
    4. Mihai Carp & Leontina Păvăloaia & Mihai-Bogdan Afrăsinei & Iuliana Eugenia Georgescu, 2019. "Is Sustainability Reporting a Business Strategy for Firm’s Growth? Empirical Study on the Romanian Capital Market," Sustainability, MDPI, Open Access Journal, vol. 11(3), pages 1-21, January.
    5. Nguyen Vinh Khuong & Nguyen Tran Thai Ha & Phung Anh Thu, 2019. "The Relationship between Real Earnings Management and Firm Performance: The Case of Energy Firms in Vietnam," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 307-314.
    6. Cheng Guping & Muhammad Safdar Sial & Peng Wan & Alina Badulescu & Daniel Badulescu & Talles Vianna Brugni, 2020. "Do Board Gender Diversity and Non-Executive Directors Affect CSR Reporting? Insight from Agency Theory Perspective," Sustainability, MDPI, Open Access Journal, vol. 12(20), pages 1-1, October.
    7. Rizwan Ali & Muhammad Safdar Sial & Talles Vianna Brugni & Jinsoo Hwang & Nguyen Vinh Khuong & Thai Hong Thuy Khanh, 2019. "Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms," Sustainability, MDPI, Open Access Journal, vol. 12(1), pages 1-1, December.
    8. M. A. Gulzar & Jacob Cherian & Jinsoo Hwang & Yushi Jiang & Muhammad Safdar Sial, 2019. "The Impact of Board Gender Diversity and Foreign Institutional Investors on the Corporate Social Responsibility (CSR) Engagement of Chinese Listed Companies," Sustainability, MDPI, Open Access Journal, vol. 11(2), pages 1-19, January.
    9. Shahid Ali & Junrui Zhang & Muhammad Usman & Farman Ullah Khan & Amir Ikram & Bilal Anwar, 2019. "Sub-National Institutional Contingencies and Corporate Social Responsibility Performance: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 11(19), pages 1-21, October.
    10. Frank Sampong & Na Song & Kingsley Osei Boahene & Kwame Ansong Wadie, 2018. "Disclosure of CSR Performance and Firm Value: New Evidence from South Africa on the Basis of the GRI Guidelines for Sustainability Disclosure," Sustainability, MDPI, Open Access Journal, vol. 10(12), pages 1-28, November.
    11. Jacob Cherian & Muhammad Safdar Sial & Dang Khoa Tran & Jinsoo Hwang & Thai Hong Thuy Khanh & Mansoor Ahmed, 2020. "The Strength of CEOs’Influence on CSR in Chinese listed Companies. New Insights from an Agency Theory Perspective," Sustainability, MDPI, Open Access Journal, vol. 12(6), pages 1-1, March.
    12. Muddassar Sarfraz & Syed G. M. Shah & Zeeshan Fareed & Farrukh Shahzad, 2020. "Demonstrating the interconnection of hierarchical order disturbances in CEO succession with corporate social responsibility and environmental sustainability," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2956-2971, November.
    13. Feifei Zhang & Jin-young Jung, 2020. "Changes in the Influence of Social Responsibility Activities on Corporate Value over 10 Years in China," Sustainability, MDPI, Open Access Journal, vol. 12(22), pages 1-1, November.
    14. Lei Yu & Daojuan Wang & Qi Wang, 2018. "The Effect of Independent Director Reputation Incentives on Corporate Social Responsibility: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 10(9), pages 1-15, September.
    15. Sehar Zulfiqar & Rabeea Sadaf & József Popp & Jolita Vveinhardt & Domicián Máté, 2019. "An Examination of Corporate Social Responsibility and Employee Behavior: The Case of Pakistan," Sustainability, MDPI, Open Access Journal, vol. 11(13), pages 1-15, June.
    16. Chao Lu & Xuetong Zhao & Jingwen Dai, 2018. "Corporate Social Responsibility and Insider Trading: Evidence from China," Sustainability, MDPI, Open Access Journal, vol. 10(9), pages 1-17, September.

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    More about this item

    Keywords

    corporate social responsibility; firm performance; stakeholder theory; slack resources theory; legitimacy theory; China;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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