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The Impact of Corporate Social Responsibility on Labor Investment Efficiency: Evidence from China

Author

Listed:
  • Zhizhu Yuan

    (School of Business Administration, Northeastern University, Shenyang 110169, China)

  • Junze Yu

    (School of Business Administration, Northeastern University, Shenyang 110169, China)

  • Yue Yin

    (School of Management, Northeastern University at Qinhuangdao, Qinhuangdao 066004, China)

Abstract

This study examines the impact of corporate social responsibility (CSR) on labor investment efficiency utilizing a sample of China’s listed companies. The empirical results demonstrate that CSR improves labor investment efficiency, and the effect is significant in terms of both overinvestment and underinvestment. Findings from cross-sectional tests indicate that CSR has a more significant effect on labor investment efficiency in non-state-owned firms and firms with more financing constraints or higher labor adjustment costs. The conclusion is robust after utilizing a 2SLS regression, replacing indicators for labor investment efficiency and accounting for the impact of non-labor investment. In general, the results support stakeholder theory and confirm that CSR can enhance external monitoring and improve firms’ investment behavior.

Suggested Citation

  • Zhizhu Yuan & Junze Yu & Yue Yin, 2024. "The Impact of Corporate Social Responsibility on Labor Investment Efficiency: Evidence from China," Sustainability, MDPI, vol. 16(10), pages 1-29, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:4290-:d:1397708
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