Influence Mechanism between Corporate Social Responsibility and Financial Sustainability: Empirical Evidence from China

Jing Tao, Peipei Shan, Jingbo Liang and Long Zhang ()
Additional contact information
Jing Tao: School of Business, Xinyang Normal University, Xinyang 464000, China
Peipei Shan: School of Business, Xinyang Normal University, Xinyang 464000, China
Jingbo Liang: School of Business, Xinyang Normal University, Xinyang 464000, China
Long Zhang: School of Business, Xinyang Normal University, Xinyang 464000, China

Sustainability, 2024, vol. 16, issue 6, 1-23

Abstract: With the increasing public attention being paid to corporate social responsibility and global advocacy of sustainable development, corporate governance issues centered on corporate social responsibility, especially the relationship between corporate social responsibility and financial sustainability, are important topics of concern for managers. By taking companies listed in Shanghai and Shenzhen A-share indices between 2010 and 2020 in China as samples, this study investigated the effect and mechanism of corporate social responsibility implementation on financial sustainability, examined the intermediate roles of agency cost and green innovation on this effect, and explored the heterogeneity in different contexts. The results indicated that: (1) implementing corporate social responsibility has significantly promoted financial sustainability, and fulfilling responsibilities to shareholders showed the most significant effect; (2) active pursuit of corporate social responsibility objectives can alleviate corporate agency conflicts, increase green innovation, and thus promote corporate financial sustainability; and (3) the positive impact of implementing corporate social responsibility on financial sustainability is more significant in non-state-owned enterprises and non-heavily polluting enterprises. This study revealed the specific effect of fulfilling corporate responsibility objectives for different stakeholders on financial sustainability, confirmed the mediating role of agency cost and green innovation on this effect, and discussed the intensity of the impact of fulfilling corporate social responsibility objectives on financial sustainability in different contexts. This study enhances the understanding of the effect and mechanism of fulfilling corporate social responsibility obligations on financial sustainability, which can guide the advancement of future theory-building in corporate governance.

Keywords: corporate social responsibility; financial sustainability; agency cost; green innovation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/6/2406/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/6/2406/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:6:p:2406-:d:1356804

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().