The Impact of Corporate Social Responsibility on Labor Investment Efficiency: Evidence from China

Zhizhu Yuan (), Junze Yu and Yue Yin
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Zhizhu Yuan: School of Business Administration, Northeastern University, Shenyang 110169, China
Junze Yu: School of Business Administration, Northeastern University, Shenyang 110169, China
Yue Yin: School of Management, Northeastern University at Qinhuangdao, Qinhuangdao 066004, China

Sustainability, 2024, vol. 16, issue 10, 1-29

Abstract: This study examines the impact of corporate social responsibility (CSR) on labor investment efficiency utilizing a sample of China’s listed companies. The empirical results demonstrate that CSR improves labor investment efficiency, and the effect is significant in terms of both overinvestment and underinvestment. Findings from cross-sectional tests indicate that CSR has a more significant effect on labor investment efficiency in non-state-owned firms and firms with more financing constraints or higher labor adjustment costs. The conclusion is robust after utilizing a 2SLS regression, replacing indicators for labor investment efficiency and accounting for the impact of non-labor investment. In general, the results support stakeholder theory and confirm that CSR can enhance external monitoring and improve firms’ investment behavior.

Keywords: corporate social responsibility; labor investment efficiency; property rights; financing constraints; labor adjustment costs (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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