Does corporate social responsibility improve financial performance? -evidence from pure green side✰

Yang Wang, Jun Liu, Xiuping Sui and Libing Liu

Finance Research Letters, 2020, vol. 36, issue C

Abstract: This paper discusses the causal effects of environment protection expenditure on the financial performance of the company, analyzing the data from different region and scale companies. Using a large panel of Listed companies in China from 2012 to 2017, we introduce average CSR Index by province and propose the green design expenditure to overcome the endogenous problem and find some meaningful results. First, the environment protection expenditure, which seems to be pure green cost can improve the financial performance of the company. Second, the effect varies with the company's location and scale, the less opening area and small companies will have more intensive influence, because they are more affected by financial constraints. Thirdly, the effect in more related to “Green”, the green design fees will also have positive effect than other expenditure.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:36:y:2020:i:c:s1544612319312413

DOI: 10.1016/j.frl.2020.101522

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