Does voluntary adoption of clawback provisions improve corporate social responsibility: Evidence from China

Donghua Zhou, Liu Yang and Yujie Zhao

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: Using manually collected data on the voluntary adoption of clawback provisions by China's listed companies, this study explores the impact of clawbacks on Corporate Social Responsibility (CSR). The results reveal that clawbacks significantly boost CSR by mitigating managerial short-termism and fostering risk-averse behavior. Additionally, the effect is more pronounced in non-environmentally or non-consumption-sensitive industries, and firms led by management with lower career stability or a less sense of responsibility. Our study represents a pioneering exploration of the beneficial effects of clawback provisions in China.

Keywords: Clawback provisions; Corporate social responsibility; Short-termism; Risk aversion; Executive compensation (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012169

DOI: 10.1016/j.frl.2024.106187

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