Will the Governance of Non-State Shareholders Inhibit Corporate Social Responsibility Performance? Evidence from the Mixed-Ownership Reform of China’s State-Owned Enterprises

Rongwu Zhang,Yanzhen Lin,Yingxu Kuang

doi:10.3390/su14010527

Abstract

Fulfilling social responsibilities in order to sustain development has increasingly become a strategic choice for companies. Good corporate governance can guarantee high corporate social responsibility performance. This paper selects state-owned enterprises listed on the Shanghai and Shenzhen A-Share market from 2013 to 2019 as samples and uses a panel data OLS regression model to empirically test the impact of the governance of non-state shareholders on the social responsibility performance of state-owned enterprises from two aspects of shareholding: structure and high-level governance. The results show that, first, the governance of non-state shareholders helps to improve the social responsibility performance of state-owned enterprises; second, that mechanism analysis indicates that non-state shareholders improve the social responsibility performance of state-owned enterprises by improving the internal control quality; and third, the impact of the governance of non-state shareholders on the social responsibility performance of state-owned enterprises is heterogeneous in three aspects: the degree of marketization, the level of product market competition, and the corporate profitability. This paper not only helps to clarify the factors which influence the social responsibility performance of state-owned enterprises, but also enriches studies on the economic consequences brought by non-state shareholders through participating in the governance of state-owned enterprises.

Highlights

As China’s president Xi Jinping said, only caring wealth is truly meaningful wealth, and only companies that actively undertake social responsibility are the most competitive and vital companies [1]
Based on the few studies on the interactive relationship between the governance of non-state shareholders and the level of corporate social responsibility performance, this paper explores the following three questions: (1) Does the governance of non-state shareholders affect the social responsibility performance of state-owned enterprises?; (2) If so, what is the mechanism by which the governance of non-state shareholders affects the social responsibility performance of stateowned enterprises?; and (3) In which aspects do heterogeneous impacts exist?
In order to test the impact of the governance of non-state shareholders on the level of social responsibility performance of state-owned enterprises, the panel data OLS regression model was used to conduct an econometric test

Summary

Introduction

As China’s president Xi Jinping said, only caring wealth is truly meaningful wealth, and only companies that actively undertake social responsibility are the most competitive and vital companies [1]. Corporate social responsibility performance is a cost or constraint, and nurtures opportunities, promotes innovation, and enhances competitiveness. By actively fulfilling their social responsibilities, companies can reduce capital costs [3,4], financing constraints [5,6], and corporate risk [7,8,9]; improve product awareness [10], customer loyalty [11,12,13], and corporate reputation [14,15]; and thereby increase revenue and value [16,17,18,19], maximize long-term profit [20], and achieve sustainable development [21,22]

Methods

Discussion

Conclusion