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Corporate social responsibility and corporate financialization—Based on information effect and reputation insurance effect

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  • Lei Lei
  • Di Zheng
  • XuDong Chen

Abstract

China has witnessed the trend of corporate financialization (CF) with some potential risks as the economy slows down its pace in the past decade. In this paper, we explore whether corporate social responsibility (CSR) could work as an information channel to restrain CF or as reputation insurance to promote CF. We find a significant positive relation between CSR and CF, especially for non-SOEs and enterprises with low ownership concentration and high CSR scores. It verifies that the reputation insurance effect by CSR outweighs the information effect and denies the opposite. The results prove robust in tests including sensitivity and endogeneity test. By expanding the scale and adding new aspects to the discussion about how CSR affects CF, this paper provides valuable empirical support to both theorists and practitioners.

Suggested Citation

  • Lei Lei & Di Zheng & XuDong Chen, 2022. "Corporate social responsibility and corporate financialization—Based on information effect and reputation insurance effect," PLOS ONE, Public Library of Science, vol. 17(7), pages 1-18, July.
    • Handle: RePEc:plo:pone00:0271552
    DOI: 10.1371/journal.pone.0271552
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    References listed on IDEAS

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    Cited by:

    1. Yan Liu & Xiuhong Du, 2024. "How does analyst coverage influence corporate social responsibility (CSR)? The governance- and information-based perspectives," PLOS ONE, Public Library of Science, vol. 19(4), pages 1-24, April.

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