Impact of Women and Independent Directors on Corporate Social Responsibility and Financial Performance: Empirical Evidence from an Emerging Economy

Chenxi Wang, Xincai Deng, Susana Álvarez-Otero, Muhammad Safdar Sial, Ubaldo Comite, Jacob Cherian and Judit Oláh
Additional contact information
Chenxi Wang: School of Management, Jinan University, Guangzhou 510632, China
Xincai Deng: School of Economics and Management, Guizhou Normal University, Guizhou 550001, China
Susana Álvarez-Otero: Department of Business Administration, Faculty of Economics and Business, University of Oviedo, 33003 Oviedo, Spain
Muhammad Safdar Sial: Department of Management Sciences, COMSATS University Islamabad (CUI), Islamabad 44000, Pakistan
Ubaldo Comite: Department of Business Sciences, University Giustino Fortunato, 82100 Benevento, Italy
Jacob Cherian: College of Business, Abu Dhabi University, Abu Dhabi P.O. Box 59911, United Arab Emirates
Judit Oláh: Department of Management, Faculty of Applied Sciences, WSB University, 41-300 Dabrowa Górnicza, Poland

Sustainability, 2021, vol. 13, issue 11, 1-16

Abstract: The purpose of our study is to investigate the impact of women and independent directors on corporate social responsibility and financial performance. We use the fixed effect regression model as a baseline methodology. The data set includes information from 2010 to 2019 regarding Chinese non-financial companies, from which we use yearly information. The RSK rating is used for the assessment of corporate social responsibility reporting, ranging from 0 to 100, and other data are taken from the China stock market and accounting research (CSMAR) database. We use a two-stage least square (TSLS) regression model to control the possible problem of endogeneity. The empirical results show that gender diversity in boards significantly and positively affects CSR reporting. We do not find an effect due to non-executive directors on CSR reporting. The presence of non-executive directors on a board is mostly trivial in the case of China, as they do not have much influence with regard to decision making, especially related to CSR reporting. The control variables, such as board size, board member meeting frequency and leverage, are also found to have a significant effect on CSR reporting. Therefore, our results add a new aspect to the emerging literature on CSR reporting, especially in China. Furthermore, our results are robust with regard to the alternative variables under consideration. Our study has important implications. Our research enriches the existing literature on CSR and highlights the importance of female and independent directors having an impact on decisions related to the increased reporting of CSR activities. Our study contributes to the existing literature by presenting a pioneering investigation of the effect of female and independent directors on CSR reporting, as well as shedding light on the relationship in the context of an emerging economy.

Keywords: female directors; independent directors; CSR reporting; corporate governance; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:11:p:6053-:d:563544

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