State control, corporate social performance and corporate financial performance in China

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State control, corporate social performance and corporate financial performance in China

 

Author: Ho, Hoi Yin Pauline
Title: State control, corporate social performance and corporate financial performance in China
Degree: D.B.A.
Year: 2012
Subject: Social responsibility of business -- China.
Corporations -- Finance -- China.
Government business enterprises -- China.
Hong Kong Polytechnic University -- Dissertations
Department: Faculty of Business
Pages: vii, 160 leaves ; 30 cm
InnoPac Record: http://library.polyu.edu.hk/record=b2825623
URI: http://theses.lib.polyu.edu.hk/handle/200/7969
Abstract: This study examines the association between a firm's corporate social performance (CSP) and corporate financial performance (FP) based on the unique institutional framework of an emerging market. Using a multidimensional measure of a firm's level of corporate social responsibility (CSR) available in China, I find a positive association between CSP and FP, measured in terms of ROA and ROE. More importantly, this positive association is found to be significantly weaker for firms controlled by the State (State-controlled Enterprises, or SCEs), suggesting that the CSR activities engaged by politically-connected firms are less likely to be value-enhancing, consistent with the non-value-maximizing objectives pursued by these firms. In addition, results show that the moderating effect of SCEs on the CSP-FP association is stronger in provinces with weaker firm-specific information environment, poorer economic and marketization development, and weaker legal investor protection. Further analyses show that the above inferences are not sensitive to alternative specifications such as the use of future performance, alternative measures of state influence and a battery of other robustness checks. These results contribute to our understanding on how CSR activities would affect firm performance in different institutional settings.

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