The Relationship between Corporate Social Responsibility, Global Investment, and Equity Incentives

Tong Sheng, Bingquan Fang, Xiaoqian Lu, Xingheng Shi, Chaohai Shen () and Xiaolan Zhou ()
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Tong Sheng: Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
Bingquan Fang: KoGuan School of Law, Shanghai Jiao Tong University, Shanghai 200030, China
Xiaoqian Lu: Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
Xingheng Shi: Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
Chaohai Shen: Faculty of Economics and Management, East China Normal University, Shanghai 200062, China
Xiaolan Zhou: Faculty of Economics and Management, East China Normal University, Shanghai 200062, China

Sustainability, 2022, vol. 14, issue 23, 1-27

Abstract: Listed companies have long faced difficulties in both their global investment strategies and corporate governance improvement, while they are supposed to pay more attention to their sustainable development performance. The complex linkages between these three make the choice of corporate strategy a challenge for public companies. Given the economic downturn in the post-pandemic era, the challenges for listed companies are likely to be even more acute. How companies weigh the relationships between these three and how to ensure the implementation of a global investment strategy that effectively meets sustainable development are pressing challenges. Using a sample of Chinese listed companies during 2010–2018, this paper empirically examines the relationship between corporate sustainable development performance, global investment reflected by outward foreign direct investment (OFDI), and corporate governance reflected by equity incentives with econometric tools. We show the positive effects of OFDI on corporate sustainable development performance and discover the crowding-out effect of equity incentives, which challenges the view of equity motivation. These findings are robust. We further explore the heterogeneities in terms of industries and regions. We finally provide some useful implications on how to coordinate the global investment and internal equity incentives to improve corporate sustainable development performance.

Keywords: corporate sustainable development; corporate social responsibility; outward foreign direct investment; equity incentives (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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