Crises and changes: The impacts of CSR expenditure on loan and subsidy allocation in China's Pre- and Post-Pandemic periods

Yuming Zhang, Chao Xing, Quanli Zhang and Xinyue Zhang

Finance Research Letters, 2022, vol. 47, issue PB

Abstract: China's governments reward corporate social responsibility (CSR) by granting subsidies or loans. Using China's listed firm data, we prove that firms with higher CSR expenditure levels are granted more loans than subsidies before the COVID-19 outbreak. However, in the post-pandemic period, the impact on loans is mitigated but that on subsidies is enhanced. This reverse phenomenon is more significant for politically connected firms, state-owned enterprises and regions with a low marketisation level. We show that subsidies are beneficial for firm value in the post-pandemic period. These findings indicate that China's governments cooperate with prosocial firms to revive the economy.

Keywords: Corporate social responsibility; Loan; Subsidy; COVID-19; China (search for similar items in EconPapers)
JEL-codes: G20 G30 M20 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322000265

DOI: 10.1016/j.frl.2022.102697

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