Examining the Role of Stakeholder-Oriented Corporate Governance in Achieving Sustainable Development: Evidence from the SME CSR in the Context of China

Lin Zhang, Xiaochen Zhang, Jingjing An, Wei Zhang and Jingshen Yao
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Lin Zhang: School of Law, Shandong University of Technology, Zibo 255049, China
Xiaochen Zhang: School of Law, Shandong University of Technology, Zibo 255049, China
Jingjing An: School of Law, Shandong University of Technology, Zibo 255049, China
Wei Zhang: School of Managment, The University of Sheffield, Sheffield S10 2TN, UK
Jingshen Yao: School of Law, Fujian Normal University, Fuzhou 350117, China

Sustainability, 2022, vol. 14, issue 13, 1-22

Abstract: Corporate governance (CG) has been experiencing a shift from the antecedent shareholder-oriented system toward the recent more popular stakeholder-oriented system. To better serve the aim of sustainable development, more and more companies have initiated stakeholder-oriented practices. Increasing social responsibility behaviours demonstrate the prioritisation of stakeholders’ interests. Nevertheless, most extant research on stakeholder-oriented CG focuses on MNEs and large listed companies. Limited attention has been paid to the small and medium-sized enterprises (SMEs) sector. This study aims to fill this gap by providing empirical evidence of Chinese SME corporate social responsibility (CSR). We develop and test two hypotheses by using samples of 172 Chinese listed SMEs. Our result is distinct from most of the extant SME CG literature, given that the stakeholder-oriented CSR types have a negative impact on short-term operational profitability and expansion over a fixed period. Additionally, the government subsidy, as one of the most significant national institutions, partially moderates the relationship between stakeholder-oriented CSR and firm performance. The outcomes of this research make both theoretical and managerial contributions to SMEs’ CG systems. In the context of Chinese SME CSR, managerial stakeholder theory is a more pragmatic means to guide firms toward sustainable development than ethical stakeholder theory.

Keywords: stakeholder-oriented corporate governance; sustainable development; CSR; SMEs (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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