Abstract
This study analyzes changes in how corporate social responsibility (CSR) affects corporate value in China. We use multiple regression analysis on a sample of A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2009 to 2018. We divide the sample into 2009–2012 and 2013–2018 periods according to the development of CSR-related media and corporate policies. The dependent variable is corporate value, measured by Tobin’s Q. The independent variable is the CSR score calculated and published by RKS, a widely recognized CSR evaluation agency in China. We use firm size, sales growth rate, return on equity, top 10 shareholders’ equity, operating cash flow, and debt ratio as control variables. The panel-based regression models find no statistical correlation between CSR score and corporate value from 2009 to 2012 but find that the CSR score has a significantly positive influence on corporate value from 2013 to 2018. The impact of CSR activities on corporate value increases over the 10-year period. This decade saw the Chinese government shift its development strategy from a rapid growth model to a high-quality growth model and pursue sustainable development. This study is useful for Chinese companies considering adopting CSR activities to promote sustainable development.
Highlights
China’s economy has been in a high-growth stage since the country’s reform and opening-up began in 1978
This research is devoted to studying the changes in the relationship between corporate social responsibility (CSR) and corporate value using a sample of companies listed in the Chinese market from 2009 to 2018
This study confirms that there is no statistical correlation between CSR activities and corporate value from 2009 to 2012
Summary
China’s economy has been in a high-growth stage since the country’s reform and opening-up began in 1978. The traditional corporate perception of CSR activities in China has tended to be passive According to this view, CSR activities consume company resources and lower its economic power; it may improve corporate value in the long term, but it decreases it in the short term. Most of the research on the relationship between CSR activities and corporate value uses a maximum of three years of data [26,53,54], but this study’s sample period spans 2009 to 2018, providing 10 years of data. This expanded sample size allows us to analyze recent trends in the impact of CSR activities on corporate value.
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