The Impact of CSR and Financial Distress on Financial Performance—Evidence from Chinese Listed Companies of the Manufacturing Industry

Liu Wu, Zhen Shao, Changhui Yang, Tao Ding and Wan Zhang
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Liu Wu: School of Management, Hefei University of Technology, Hefei 230009, China
Zhen Shao: School of Management, Hefei University of Technology, Hefei 230009, China
Changhui Yang: School of Management, Hefei University of Technology, Hefei 230009, China
Tao Ding: School of Management, Hefei University of Technology, Hefei 230009, China
Wan Zhang: School of Humanities and Social Science, University of Science and Technology of China, Hefei 230026, China

Sustainability, 2020, vol. 12, issue 17, 1-19

Abstract: This paper explores the impact of corporate social responsibility (CSR) and financial distress on corporate financial performance (CFP) in Chinese listed companies of the manufacturing industry. Covering a total of 1445 manufacturing observations from 2013 to 2018 by matching the China Stock Market & Accounting Research Database (CSMAR) and Ranking CSR Ratings (RKS) database and regression models, we find that CSR has a significant positive impact on CFP, and the relationship is more pronounced for firms that are more stable. Further, the win-win relationship of CSR and CFP is also stronger in state-owned enterprises (SOEs). These empirical results suggest that enterprises should actively embrace CSR in response to the call of the country. At the same time, corporate stability should be increased to enhance the role of CSR in promoting CFP. We provide a quantitative analysis of the CSR, CFP, and financial distress of listed firms, and help to alleviate managers’ concern of CSR fulfillment and risk control.

Keywords: corporate social responsibility; financial performance; financial distress; ownership (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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