Administrative penalties and corporate CSR disclosure strategies

Linlin Duan, Jintao Zhang and Li Meng

Managerial and Decision Economics, 2024, vol. 45, issue 4, 2360-2372

Abstract: Corporate social responsibility (CSR) disclosure is an important way for firms to achieve social goals. As stakeholders pay more attention to CSR performance, the CSR report strategy has attracted academic attention. Prior studies have stressed the important role of positive CSR disclosure strategies in a firm's reputation and market value, but our study shows different findings. Using a sample of China's A‐share listed firms from 2008 to 2019, we find a significant negative correlation between administrative penalties and the use of pictures and tables in CSR reports, which is more significant for firms being penalized rather than individuals in firms. Investor attention and agency costs provide a mechanism explanation. Heterogeneity analysis shows that in regions with a low level of legal institutions, the effects of administrative penalties on the use of pictures and tables in CSR reports are more significant. Nevertheless, the seemingly negative disclosure strategy ultimately contributes to corporate value.

Date: 2024
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https://doi.org/10.1002/mde.4147

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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2360-2372

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