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Does Firm Performance Influence Corporate Social Responsibility Reporting of Chinese Listed Companies?

Muhammad Safdar Sial (), Chunmei Zheng (), Nguyen Vinh Khuong (), Tehmina Khan () and Muhammad Usman ()
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Muhammad Safdar Sial: School of Economics and Management of Wuhan University, Wuhan 430072, China
Chunmei Zheng: School of Economics and Management of Wuhan University, Wuhan 430072, China
Nguyen Vinh Khuong: Faculty of Accounting and Auditing, University of Economics and Law, Viet Nam National University, Ho Chi Minh City 700000, Vietnam
Tehmina Khan: School of Accounting, RMIT University, Melbourne 3000, Australia
Muhammad Usman: School of Management, Xi’an Jiaotong University, Xi’an 710049, China

Sustainability, 2018, vol. 10, issue 7, 1-12

Abstract: This study aims to investigate whether firm performance influences corporate social responsibility reporting of Chinese listed companies. We have used the sample of all A-share listed firms on Shenzhen and Shanghai stock exchanges for the period 2008 to 2015. The authors used pooled ordinary least squares (OLS) regression as a baseline methodology. To control the possible problem of endogeneity we use one year lagged and two-stage least squares regression. We find that firm performance has a statistically significant impact on CSR reporting. Moreover, we see that firms with high performance are more likely to report CSR activities than low-performance firms. Additionally, five of the control variables (board size, CEO power, SOE, firm size, and Big4) have some influence on CSR reporting. These findings hold for a set of robustness tests. Our results have implications for the development of CSR reporting in developing countries like China. Our research suggests that, in China, companies with better financial performance undertake more CSR reporting. The paper contributes to the existing literature by investigating the effect of firm performance on CSR reporting of Chinese listed companies. Additionally, this paper enriches the current literature on CSR reporting and highlights the importance of a firm’s financial performance for better environmental performance and reporting.

Keywords: corporate social responsibility; firm performance; stakeholder theory; slack resources theory; legitimacy theory; China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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