IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i4p2360-2372.html

Administrative penalties and corporate CSR disclosure strategies

Author

Listed:
  • Linlin Duan
  • Jintao Zhang
  • Li Meng

Abstract

Corporate social responsibility (CSR) disclosure is an important way for firms to achieve social goals. As stakeholders pay more attention to CSR performance, the CSR report strategy has attracted academic attention. Prior studies have stressed the important role of positive CSR disclosure strategies in a firm's reputation and market value, but our study shows different findings. Using a sample of China's A‐share listed firms from 2008 to 2019, we find a significant negative correlation between administrative penalties and the use of pictures and tables in CSR reports, which is more significant for firms being penalized rather than individuals in firms. Investor attention and agency costs provide a mechanism explanation. Heterogeneity analysis shows that in regions with a low level of legal institutions, the effects of administrative penalties on the use of pictures and tables in CSR reports are more significant. Nevertheless, the seemingly negative disclosure strategy ultimately contributes to corporate value.

Suggested Citation

  • Linlin Duan & Jintao Zhang & Li Meng, 2024. "Administrative penalties and corporate CSR disclosure strategies," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2360-2372, June.
    • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2360-2372
    DOI: 10.1002/mde.4147
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4147
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.4147?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kumar, Alok & Lei, Zicheng & Zhang, Chendi, 2022. "Dividend sentiment, catering incentives, and return predictability," Journal of Corporate Finance, Elsevier, vol. 72(C).
    2. Tanveer Ahsan & Bakr Al-Gamrh & Sultan Sikandar Mirza, 2022. "Corporate social responsibility and firm-value: the role of sensitive industries and CEOs power in China," Applied Economics, Taylor & Francis Journals, vol. 54(16), pages 1844-1863, April.
    3. Zhang, Jintao & Lei, Xinghui & Su, Taoyong & Tang, Li, 2022. "The effect of a list: How firms on key pollution supervisory list disclose environmental information?," Finance Research Letters, Elsevier, vol. 47(PA).
    4. Ramzi Benkraiem & Fatima Shuwaikh & Faten Lakhal & Assil Guizani, 2022. "Carbon performance and firm value of the World's most sustainable companies," Post-Print hal-03763998, HAL.
    5. Henri Servaes & Ane Tamayo, 2013. "The Impact of Corporate Social Responsibility on Firm Value: The Role of Customer Awareness," Management Science, INFORMS, vol. 59(5), pages 1045-1061, May.
    6. Qingbo Yuan & Yunyan Zhang & Steven Cahan, 2016. "The real effects of corporate fraud: evidence from class action lawsuits," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 56(3), pages 879-911, September.
    7. Martin J. Conyon & Lerong He, 2016. "Executive Compensation and Corporate Fraud in China," Journal of Business Ethics, Springer, vol. 134(4), pages 669-691, April.
    8. Vivien A. Beattie & Michael J. Jones, 2000. "Changing Graph Use in Corporate Annual Reports: A Time†Series Analysis," Contemporary Accounting Research, John Wiley & Sons, vol. 17(2), pages 213-226, June.
    9. Amin, Qazi Awais & Cumming, Douglas, 2023. "The politician as a CEO, corporate governance and firm value," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 87(C).
    10. Sana Noor & Abubakr Saeed & Muhammad Saad Baloch & Muhammad Awais, 2020. "CSR permanency, family ownership, and firm value: Evidence from emerging economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2135-2149, September.
    11. Warren, Danielle E., 2019. "The Persistence of Organizational Deviance: When Informal Sanctioning Systems Undermine Formal Sanctioning Systems," Business Ethics Quarterly, Cambridge University Press, vol. 29(1), pages 55-84, January.
    12. Patten, Dennis M., 2002. "The relation between environmental performance and environmental disclosure: a research note," Accounting, Organizations and Society, Elsevier, vol. 27(8), pages 763-773, November.
    13. Anna M. Cianci & Shana M. Clor-Proell & Steven E. Kaplan, 2019. "How Do Investors Respond to Restatements? Repairing Trust Through Managerial Reputation and the Announcement of Corrective Actions," Journal of Business Ethics, Springer, vol. 158(2), pages 297-312, August.
    14. Zyglidopoulos, Stelios C. & Georgiadis, Andreas P. & Carroll, Craig E. & Siegel, Donald S., 2012. "Does media attention drive corporate social responsibility?," Journal of Business Research, Elsevier, vol. 65(11), pages 1622-1627.
    15. Aerts, Walter, 2005. "Picking up the pieces: impression management in the retrospective attributional framing of accounting outcomes," Accounting, Organizations and Society, Elsevier, vol. 30(6), pages 493-517, August.
    16. Jianjun Zhang & Christopher Marquis & Kunyuan Qiao, 2016. "Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms," Organization Science, INFORMS, vol. 27(5), pages 1307-1324, October.
    17. Benschop, Yvonne & Meihuizen, Hanne E., 2002. "Keeping up gendered appearances: representations of gender in financial annual reports," Accounting, Organizations and Society, Elsevier, vol. 27(7), pages 611-636, October.
    18. Jingyu Gao & F.G.H. (Frank) Hartmann & Min Zhang & Yasheng Chen, 2023. "The impact of CSR performance and CSR disclosure readability on investors’ earnings estimates," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1157-1186, April.
    19. Lu Zhang & Yuan George Shan & Millicent Chang, 2021. "Can CSR Disclosure Protect Firm Reputation During Financial Restatements?," Journal of Business Ethics, Springer, vol. 173(1), pages 157-184, September.
    20. María del Mar Miras‐Rodríguez & Francisco Bravo‐Urquiza & Bernabé Escobar‐Pérez, 2020. "Does corporate social responsibility reporting actually destroy firm reputation?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1947-1957, July.
    21. Firth, Michael & Rui, Oliver M. & Wu, Wenfeng, 2011. "Cooking the books: Recipes and costs of falsified financial statements in China," Journal of Corporate Finance, Elsevier, vol. 17(2), pages 371-390, April.
    22. repec:eme:maj000:maj-12-2019-2515 is not listed on IDEAS
    23. Rajat Panwar & Karen Paul & Erlend Nybakk & Eric Hansen & Derek Thompson, 2014. "The Legitimacy of CSR Actions of Publicly Traded Companies Versus Family-Owned Companies," Journal of Business Ethics, Springer, vol. 125(3), pages 481-496, December.
    24. Benkraiem, Ramzi & Shuwaikh, Fatima & Lakhal, Faten & Guizani, Assil, 2022. "Carbon performance and firm value of the World's most sustainable companies," Economic Modelling, Elsevier, vol. 116(C).
    25. An, Yunbi & Jin, Han & Liu, Qingfu & Zheng, Kaixin, 2022. "Media attention and agency costs: Evidence from listed companies in China," Journal of International Money and Finance, Elsevier, vol. 124(C).
    26. Tsai, Yu-Cheng & Huang, Hua-Wei, 2021. "Internal control material weakness opinions and the market's reaction to securities fraud litigation announcements," Finance Research Letters, Elsevier, vol. 41(C).
    27. Al-Shaer, Habiba & Uyar, Ali & Kuzey, Cemil & Karaman, Abdullah S., 2023. "Do shareholders punish or reward excessive CSR engagement? Moderating effect of cash flow and firm growth," International Review of Financial Analysis, Elsevier, vol. 88(C).
    28. Eugenia Yujin Lee & Wonsuk Ha, 2021. "Auditors’ response to corporate fraud: evidence from audit fees and auditor turnover," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 36(3), pages 405-436, July.
    29. Hans Rämö, 2011. "Visualizing the Phronetic Organization: The Case of Photographs in CSR Reports," Journal of Business Ethics, Springer, vol. 104(3), pages 371-387, December.
    30. Fich, Eliezer M. & Shivdasani, Anil, 2007. "Financial fraud, director reputation, and shareholder wealth," Journal of Financial Economics, Elsevier, vol. 86(2), pages 306-336, November.
    31. Graves, O. Finley & Flesher, Dale L. & Jordan, Robert E., 1996. "Pictures and the bottom line: The television epistemology of U.S. annual reports," Accounting, Organizations and Society, Elsevier, vol. 21(1), pages 57-88, January.
    32. Walid Cheffi & Chrisovalantis Malesios & Ahmed Abdel‐Maksoud & Sonia Abdennadher & Prasanta Dey, 2021. "Corporate social responsibility antecedents and practices as a path to enhance organizational performance: The case of small and medium sized enterprises in an emerging economy country," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(6), pages 1647-1663, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaohui Chen & Xiang Cheng, 2025. "Impacts of administrative penalties towards digital technology companies on business credit supply," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(1), pages 253-265, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. F. Cappellieri & R. Vinciguerra & A. Ricciardi & M. Pizzo, 2025. "Independent minority directors against self-serving and manipulative practices in non- financial reporting," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 29(2), pages 453-501, June.
    2. Feng He & Hanyu Du & Youwei Li & Jing Hao, 2025. "Make it Right: Regulatory Intervention in Managers’ Misconduct and Corporate Risk," Journal of Business Ethics, Springer, vol. 202(1), pages 73-95, November.
    3. Isabel‐María García‐Sánchez & Cristina‐Andrea Araújo‐Bernardo, 2020. "What colour is the corporate social responsibility report? Structural visual rhetoric, impression management strategies, and stakeholder engagement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 1117-1142, March.
    4. Beattie, Vivien, 2014. "Accounting narratives and the narrative turn in accounting research: Issues, theory, methodology, methods and a research framework," The British Accounting Review, Elsevier, vol. 46(2), pages 111-134.
    5. Hellmann, Andreas & Scagnelli, Simone D. & Ang, Lawrence & Sood, Suresh, 2024. "Exploring impression management through eye-tracking: A study on the influence of photographs in financial reporting," Journal of Behavioral and Experimental Finance, Elsevier, vol. 44(C).
    6. Albrecht, Disen Huang & Anantharaman, Divya & Zhao, Keyi, 2025. "Is a picture worth a thousand words? Image usage in ESG reports," Accounting, Organizations and Society, Elsevier, vol. 115(C).
    7. Ji-Hee Kim & Ji-Hwan Lee, 2021. "How CEO Political Connections Induce Corporate Social Irresponsibility: An Empirical Study of Tax Avoidance in South Korea," Sustainability, MDPI, vol. 13(14), pages 1-13, July.
    8. Sirui Wu & Guangming Gong & Xin Huang & Haowen Tian, 2022. "The Interaction Between Suppliers and Fraudulent Customer Firms: Evidence from Trade Credit Financing of Chinese Listed Firms," Journal of Business Ethics, Springer, vol. 179(2), pages 531-550, August.
    9. Davison, Jane, 2014. "Visual rhetoric and the case of intellectual capital," Accounting, Organizations and Society, Elsevier, vol. 39(1), pages 20-37.
    10. Zhang, Jintao & Su, Taoyong & Meng, Li, 2024. "Retreat in order to advance: Environmental performance below legality aspiration and corporate disclosure strategy," International Review of Financial Analysis, Elsevier, vol. 93(C).
    11. Jongmoo Jay Choi & Hoje Jo & Jimi Kim & Moo Sung Kim, 2018. "Business Groups and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 153(4), pages 931-954, December.
    12. Yu Shang & Yanan Chi, 2023. "Corporate Environmental Information Disclosure and Earnings Management in China: Ethical Behaviour or Opportunism Motivation?," Sustainability, MDPI, vol. 15(11), pages 1-23, May.
    13. Wu, Jiayi & Lai, Aolin & Li, Zhenran & Wang, Qunwei, 2024. "Investment efficiency of renewable energy enterprises when exposed to air pollution: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    14. Dongli Cao & Chunxian Nie, 2024. "Effect of government’s environmental attention on corporate philanthropy based on the institutional theory: Evidence from China’s heavily polluting companies," PLOS ONE, Public Library of Science, vol. 19(10), pages 1-31, October.
    15. Hrasky, Sue, 2012. "Visual disclosure strategies adopted by more and less sustainability-driven companies," Accounting forum, Elsevier, vol. 36(3), pages 154-165.
    16. Riccardo Torelli & Federica Balluchi & Katia Furlotti, 2020. "The materiality assessment and stakeholder engagement: A content analysis of sustainability reports," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 470-484, March.
    17. Lai Van Vo & Huong Thi Thu Le & Youngbin Kim, 2023. "Board interlocks, career prospects and corporate social responsibility," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4565-4595, December.
    18. Yingzhao Xiao & Liuyang Xue & David Ahlstrom & Chundong Zheng & Xiling Hao, 2024. "To Conform or Not to Conform? The Role of Social Status and Firm Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 193(3), pages 655-677, September.
    19. Yichen Wang & Christopher Marquis, 2025. "Does Product Market Competition Promote or Reduce Firms’ Corporate Social Responsibility Behavior? How Stakeholder Attention Shapes Responsiveness to Stakeholders," Journal of Business Ethics, Springer, vol. 200(4), pages 867-896, September.
    20. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Springer, vol. 151(4), pages 1027-1047, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2360-2372. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.