Abstract
The context of China fosters different contextual factors, which influences the quality of corporate social responsibility (CSR) disclosure in comparison to firms across the rest of the world. Political ties at a corporate level are one of these vital factors. This paper studies the influence of firm-level political ties (PT) and executive turnover (ET) on the quality of CSR disclosure in the context of shareholding status of departing executive in Chinese listed A-share firms. Stakeholder and Agency theories are applied to the dissemination of CSR disclosures in Chinese firms whereby we used 20,578 firm-years interpretations of Chinese registered companies between 2012 and 2019. The results foster a negative link between executive turnover and quality of CSR disclosures. In addition, a negative relationship has been found between political ties and the quality of CSR disclosure. The findings disclose that the shareholding status of departing executive moderate the relationship between the impact of political ties and executive turnover on firms quality of CSR disclosure, whilst the effect of executive turnover on the quality of CSR disclosure was found more pronounced for firms whose departing executive held larger shareholding (SH). This study contributed to the literature on the quality of CSR disclosure while recognizing the negative effect of executive turnover on a firm’s quality of CSR disclosure for politically tied firms with a reinforcing moderating role of the shareholding status of departing executive.
Highlights
Model 1 presents the relationship between the quality of corporate social responsibility (CSR) disclosure and while testing hypothesis 1
Model 3 shows a moderation of executive turnover and dependent quality of CSR disclosure with shareholding status while testing hypothesis 3
In Models 4 and 5, the interaction of quality of CSR disclosure is observed on political ties and executive turnover
Summary
In China, companies are usually politically connected, and a huge part of the literature shows that political ties hold considerable significance for firms. The third question regards the role of the shareholding status of departing executive in the connection between and quality of CSR disclosure for a firm?. The literature on the effects of executive turnover on the quality of CSR disclosure in political ties firms is scant and it will enhance our understanding of this phenomenon in the premise of upper echelon and stakeholder theories. The contextual and moderating role of the shareholding status of the departing executive inculcates the agency perspective in a more pronounced manner The answers to this question are interesting and contribute to our understanding of the interplay between executive turnover and quality of CSR disclosure in the firms in the context of shareholding status, as no previous study has looked at this interplay. The rest of the study is organized as follows: Section 2 presents the literature review and hypotheses development; Section 3 explains the methodology; Section 4 presents the descriptive statistics, correlation matrix; Section 5 results and, Section 6 presents the conclusion and limitations
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