Corporate governance and corporate social responsibility: new evidence from China

Abstract

Purpose This paper aims to examine the impact of corporate governance on corporate social responsibility (CSR) performance, paying particular attention to modern Chinese businesses. Particularly, it examines how ownership concentration, boards of directors and boards of supervisors affect the quality of CSR performance. Design/methodology/approach This study employs the regression analysis using a sample from listed companies in Shanghai and Stock Exchanges covering 2014 until 2018. Findings Using a sample of listed companies in Shanghai and Stock Exchanges, the empirical evidence, A-share listed companies between 2014 and 2018, this empirical investigation demonstrates that corporate governance does indeed have a significant effect on CSR. However, various types of corporate governance mechanisms have differing effects on CSR. The authors find that ownership concentration has a positive impact on CSR performance, while the size of a company’s board of supervisors has a positive impact on CSR performance. By doing so, the authors provide practical implications to users, and regulatory authorities to make better decisions Originality/value This paper contributes to the existing literature by examining the impact of corporate governance on a company’s abilities to meet its CSR objectives in China. Much of the empirical studies on this issue are centred on the Western world, notably Western Europe and the USA.

Audit committee characteristics and corporate philanthropic donations before and during COVID-19

“…Profitability (ROE) results indicate an insignificant positive association with corporate philanthropic donations before COVID-19 ( β = 0.577, p = 0.304) and during the pandemic ( β = 0.569, p = 0.496). These findings are consistent with the result obtained by Aboud and Yang (2022), revealing that profitability does not enhance CSR performance.…”

“…These results contradict the results obtained by Akhter and Kabir (2018) ). These findings are consistent with the result obtained by Aboud and Yang (2022), revealing that profitability does not enhance CSR performance.…”

“…Size has a significant positive relationship with corporate philanthropic donations before COVID-19 ( β = 0.7, p = 0.001). This finding corresponds with the study by Cha and Abebe (2016), Aboud and Yang (2022) and Ananzeh et al (2022), which indicates that firm size increases CSR spending. However, size has an insignificant positive relationship with corporate philanthropic donations during COVID-19 ( β = 0.415, p = 0.110).…”

“…We also included two other firm attributes, size and profitability, which are believed to influence CSR spending. The size of a firm is expected to positively influence corporate philanthropy (Cha and Abebe, 2016; Ananzeh et al , 2022; Aboud and Yang, 2022). Similarly, profitability is another firm attribute that is expected to increase the level of the firm’s philanthropic donations (Ananzeh et al , 2022; Umar, 2022).…”

“…As a result, forming audit committees with a greater proportion of independent directors is probably a reflection of effective corporate governance procedures (Ananzeh et al , 2022). Also, a higher proportion of independent directors helps to assure a company’s independence and objectivity, which, in turn, protects the rights of minority shareholders and enhances decision-making effectiveness (Aboud and Yang, 2022). Hence, the new sarbanes-oxley act (SOX) regulations provide that audit committee members should be independent (Tai et al , 2020).…”