EconPapers    
Economics at your fingertips  
 

The impact of corporate social responsibility on financial constraints: Does the life cycle stage of a firm matter?

Tianjiao Zhao and Xiang Xiao

International Review of Economics & Finance, 2019, vol. 63, issue C, 76-93

Abstract: Based on a sample of China's Shanghai and Shenzhen A-share public firms during 2010–2016, we examine the role of a firm's life cycle stage on the relationship between corporate social responsibility (CSR) and financial constraints. After classifying firms into the initial, growth, mature, and declining stages of the life cycle, we find that for firms in the growth, mature, and declining phases of the life cycle the CSR engagement is negatively correlated with financial constraints. However, the effect of CSR relieving financial constraints is not related to firms in the initial stage of the life cycle. The results suggest that firms are not homogeneously related to the impact of CSR on financial constraints. Hence, investors can identify the firm's life cycle and take it into consideration when making decisions to minimize their investment risk. Our findings are robust using various CSR and financial constraint measurements. This study can also help regulators make more reasonable and reliable social responsibility disclosure policies appropriate for firms in different life cycle stages.

Keywords: Corporate social responsibility; Information disclosure; Financial constraints; Life cycle (search for similar items in EconPapers)
JEL-codes: G18 G32 G38 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056018303599
Full text for ScienceDirect subscribers only

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:eee:reveco:v:63:y:2019:i:c:p:76-93

DOI: 10.1016/j.iref.2018.08.010

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-05-02
Handle: RePEc:eee:reveco:v:63:y:2019:i:c:p:76-93