Abstract
With the development of economy, corporate social responsibility has been paid more and more attention. This paper examines the relationship between internal control and corporate social responsibility, and examines whether double agency costs act as intermediary roles. The research results show that effective internal control can improve the performance of corporate social responsibility and reduce the double agency costs. The first type of agency cost plays a part of intermediary role in the relationship between internal control and corporate social responsibility, while the second type of agency cost has no intermediary role.
Highlights
Since the 21st century, China’s economy has experienced rapid growth, but various social problems have erupted
This paper examines the relationship between internal control and corporate social responsibility, and examines whether double agency costs act as intermediary roles
The coefficient η1 of the model 3 is tested, which is significantly not zero, and β1 ∗η2 is the same symbol as η1, indicating that the first type of agency cost plays a partial intermediary role in the relationship between internal control and Corporate Social Responsibility (CSR)
Summary
Since the 21st century, China’s economy has experienced rapid growth, but various social problems have erupted. Most of the existing researches are based on internal control or agency costs alone, and examine the relationship between it and corporate social responsibility. Many studies have proved that internal control, corporate social responsibility and agency cost are related to each other. There are few studies that include the three in the same analytical framework This leads to the effective path of internal control to corporate social responsibility which has not been fully explored. The relationship between the second type of agency problem (major shareholders and minority shareholders) and internal control and corporate social responsibility is worth exploring. Based on the existing research and empirical conclusion, this paper analyzes the relationship and mechanism between internal control, dual agency cost and corporate social responsibility, which deepens the understanding of the effective path of internal control. According to the empirical conclusions, this paper puts forward relevant suggestions for the development of internal control and the fulfillment of corporate social responsibility in China
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