The impact of corporate social responsibility on trade credit: Evidence from Chinese small and medium-sized manufacturing enterprises

Shou, Yongyi; Shao, Jinan; Wang, Weijiao; Lai, Kee‐hung

doi:10.1016/j.ijpe.2020.107809

Cited by 55 publications

(78 citation statements)

References 49 publications

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“…Compared with those in developed economies, firms, especially small and medium-sized enterprises (SMEs), in emerging economies (e.g. China) often suffer from financial issues such as the limited capacity of credit rating and the under-developed credit guarantee system, which consequently results in financing difficulty (Shou et al , 2020; Wang et al , 2020). The emergence of SCF could greatly mitigate this situation, which makes it more important for firms in emerging economies.…”

Section: Discussionmentioning

confidence: 99%

“…We then collected the financial data of announcing firms from the China Stock Market and Accounting Research (CSMAR) database, which has been widely used by previous studies on Chinese firms (e.g. Shou et al , 2020; Wiengarten et al , 2020). Table 2 shows the distributions of the reverse factoring announcements across industries and years.…”

Section: Methodsmentioning

confidence: 99%

“…Fifth, state ownership may influence a firm's ability to undertake reverse factoring and hence its future operational performance. We measured state ownership with a dummy variable that took the value of 1 if the ultimate controller of a firm was the Chinese government and its agencies; otherwise, it took the value of 0 (Shou et al , 2020). Sixth, we controlled for three industry-level variables (i.e.…”

Section: Methodsmentioning

confidence: 99%

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How does reverse factoring affect operating performance? An event study of Chinese manufacturing firms

Shou

Shao

Wang

2021

IJOPM

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PurposeAs a popular supply chain finance (SCF) strategy, reverse factoring has been widely adopted by buyer firms. However, the extant literature provides scant empirical evidence on the performance effect of reverse factoring. The purpose of this study is to seek to narrow this gap by empirically examining the relationship between reverse factoring and operating performance and the contingency conditions of this relationship.Design/methodology/approachBased on a sample of 167 announcements of reverse factoring implementation made by publicly listed Chinese manufacturing firms between 2014 and 2018, this paper employs a long-term event study approach to analyze the operating performance effect of reverse factoring as well as the moderating effects of production and innovation capabilities.FindingsThe event study results indicate that reverse factoring has a positive effect on buyer firms' operating performance in terms of cost efficiency and operating margin. In addition, both production and innovation capabilities positively moderate the relationship between reverse factoring and operating margin. However, neither of them moderates the relationship between reverse factoring and cost efficiency.Originality/valueThis is the first study that empirically examines the impact of reverse factoring on operating performance based on secondary data. Furthermore, it sheds light on the SCF literature by providing insights into the contingency effects of production and innovation capabilities, which also extends our understanding of the application of extended resource-based view in SCF research.

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Section: Discussionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

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How does reverse factoring affect operating performance? An event study of Chinese manufacturing firms

Shou

Shao

Wang

2021

IJOPM

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“…Under these 5 categories, there are 13 subcategories and 37 indicators. Hexun’s evaluation system is one of the main tools used to measure Chinese listed companies’ social responsibility performance and this proxy for CSR is widely used in the prior literature (Li and Foo, 2015; Xiong et al , 2016; Tang et al , 2018, 2019; Zhao and Xiao, 2019; Zhong et al , 2019; An, 2020; Shou et al , 2020; Wang et al , 2020; Zhang et al , 2020). In an additional test, we use the CSR score of each of the five categories (namely, the responsibility to shareholders; to employees; to suppliers, customers and consumer rights; to the environment and to society), as well as corporate donation (from the CSMAR database) and CSR report quality data (from the RKS database) to further examine whether the inhibitory effect of EPU on CSR holds true for various dimensions of generalized CSR.…”

Section: Methodsmentioning

confidence: 99%

Economic policy uncertainty and corporate social responsibility performance: evidence from China

Zhao

Xiao

Zhang

2021

SAMPJ

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Purpose The purpose of this paper is to show how the external issue of economic policy uncertainty (EPU) affects enterprises’ corporate social responsibility (CSR). Design/methodology/approach This study investigates the relationship between EPU and CSR based on the Chinese capital market from 2010 to 2018. Following the most recent studies focused on economic policy uncertainty, this paper uses the news-based method proposed by Baker et al. (2016) to measure EPU and explore the effect of EPU on CSR, as well as the mediating role of state ownership in such a relationship. Findings Empirical results show that increasing EPU will restrain enterprises’ social responsibility behaviour and the inhibitory effect is more obvious for state-owned enterprises. Further analyses reveal that the inhibitory effect of EPU on CSR is stronger for enterprises that face severe financial constraints and is significant for various components of CSR, and trade policy uncertainty could also curb enterprises’ social responsibility behaviour. Practical implications As a stable economic environment is important for enterprises’ CSR engagement, the present study’s conclusions can help policymakers better understand the implications of policy stability for enterprises’ financial and non-financial decisions and especially their CSR decisions. Social implications With the increasing attention paid to the CSR of enterprises, this study provides evidence that enterprises should develop appropriate CSR strategies according to the economic policy environment and enhance their capacity to withstand the risks generated by EPU. Originality/value To the best of the author’s knowledge, this study is the first to analyse the relationship between EPU and CSR. The results contribute to a better understanding of what issues influence enterprises’ CSR engagement, highlighting the importance of a stable economic policy environment and of enterprises’ ability to withstand risks.

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“…The former mainly contains accounting-based return on assets (ROA), market-based (Tobin's Q), and perception-based financial performance [33,34]. The latter involves tangible performance, such as operational efficiency [46], labor productivity [58], quality performance [59], environmental sustainability [60], social welfare [61], and intangible performance covering trade credit [62], image, brand, reputation [63], and trust [64]. Moreover, responsible production practices trigger a series of consumer responses, such as consumers' loyalty [65], customer satisfaction [66], customer perceptions and purchase intentions [67].…”

Section: Consequencesmentioning

confidence: 99%

Responsible Production for Sustainability: Concept Analysis and Bibliometric Review

2021

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Responsible production is receiving growing attention in manufacturing operations, but systematic analysis of its concept is scanty. This paper aims to advance the knowledge by examining the research evolution of responsible production for sustainability. Using the concept analysis approach, we first summarize four underlying attributes, including the change to sustainability, preventive initiatives, process management, and company-specific context. Next, we identify that contextual factors and firm characteristics are antecedents of responsible production, which consequently affects customer attitude, employee behavior, and firm performance. Through a bibliometric review of 518 most relevant articles, we observe that responsible production for sustainability has seen a research boom in developing countries and that China is one of the most conspicuous countries in this regard. We also recognize that the link of responsible production and financial performance receives particular interest, but it needs a more synthesized assessment framework. To promote research development of responsible production for sustainability, research collaboration, either at the author or country level, is highly desirable for knowledge creation and transfer. In view of the growing interest on its performance value, we propose a research framework with guideposts for studying responsible production and financial performance. This review provides managerial and policy implications for responsible production with insights to advance knowledge in this emerging research field.

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The impact of corporate social responsibility on trade credit: Evidence from Chinese small and medium-sized manufacturing enterprises

Cited by 55 publications

References 49 publications

How does reverse factoring affect operating performance? An event study of Chinese manufacturing firms

How does reverse factoring affect operating performance? An event study of Chinese manufacturing firms

Economic policy uncertainty and corporate social responsibility performance: evidence from China

Responsible Production for Sustainability: Concept Analysis and Bibliometric Review

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