Corporate Social Performance Research Articles

Employee stock ownership plans and corporate environmental, social, and governance performance: evidence from China

Employee stock ownership plans and corporate environmental, social, and governance performance: evidence from China

Enhancing sustainable mineral extraction through corporate social responsibility and green innovation

The objective of this study is to investigate the role of green innovation and corporate social responsibility (CSR) in improving the sustainability performance of mineral extraction firms. The rationale behind exploring said perspective is the extensive use of water, materials, and energy in mineral extraction, which necessitates developing new pathways to condense the use of natural resources. In this study, we used a well-structured questionnaire method to collect primary data from employees working in the mineral extraction sector. We performed exploratory factor analysis (EFA) in SPSS after screening the initial data and then proceeded to confirmatory factor analysis (CFA) using AMOS. After verifying the structural arrangements of constructs and ensuring the data meets reliability and validity requirements, we created a structural model in AMOS to test our hypothesis. We performed the mediation analysis using bootstrap methodology, 5000 resamples, and a 95% confidence interval. The results demonstrate that corporate social responsibility to society and the environment does not have a direct impact on sustainability performance. However, corporate social responsibility toward employees and green innovation strengthens the sustainability performance of mineral extraction firms. Additionally, we found that green innovation mediates the relationship between corporate social responsibility and sustainability performance. The study concludes that the role of green innovation in the mineral extraction sector is crucial to promoting sustainability performance via CSR activities. The conclusion of this study portrays promising implications for managerial decision-making and policy development regarding the mineral extraction sector. We suggest that firms seeking to improve sustainability performance through corporate social responsibility must adopt green innovation practices, which serve as a bridge between corporate social responsibility and sustainability performance. Without doing so, the results of corporate social responsibility efforts might not be successful.

Internal Information Quality and Corporate Social Responsibility Performance: An Analysis of CSR Strengths and CSR Concerns

ABSTRACT Our study investigates whether the quality of information available within firms promotes corporate social responsibility (CSR) performance. Using different measures of internal information quality, we find that internal information quality is positively associated with CSR strengths, which are discretionary in nature, and negatively associated with CSR concerns, which are compliance oriented. We find that the positive association between internal information quality and CSR strengths is stronger in settings with internal information asymmetries due to greater cash flow volatility, a larger number of employees, or a broader geographic footprint. We also find that the negative association between internal information quality and CSR concerns is stronger in compliance settings where there are internal information asymmetries linked to year-over-year increases in concerns. Our results suggest that organizational practices that improve a firm’s internal information environment will likely enhance CSR performance by promoting CSR strengths and diminishing CSR concerns. Data Sources: Data are available from the public sources cited in the text. JEL Classifications: M14; Q56; M41; D8.

Effect of Corporate Social Performance and Dividend Payout on Value of Firms An Evidence of Non-Financial Firms Listed on Pakistan Stock Exchange

The relationship between corporate social performance, Dividend Payout and Value of Firm has been an important topic of literature and the subject of comprehensive empirical literature. However, the current literature is characterized by a lack of consistent and general research studies about the nature and direction of this unique nexus. This research study aims to contribute to the literature by reviewing the comprehensive literature on this subject related to the Pakistani corporate market. The research study used a sample size of 50 non-financial firms in Pakistan for the period of ten years from 2013-2022. The data was collected from the annual reports of non-financial firms. Regression, descriptive statistics and Correlation matrix were used to establish the relationship between corporate social performance, Dividend Payout and Value of Firm. Results were computed by using “E-views” software for the data analysis. The results of the research study revealed that there is a highly significant and positive relationship between Dividend Payout and the Value of Firm while also a significant and positive relationship between Corporate Social Performance and Value of Firm.

DECIPHERING THE HIDDEN LINKS BETWEEN CSR AND FINANCIAL PERFORMANCE: A CRITICAL APPROACH

In recent years, Corporate Social Responsibility (CSR) has become a central topic in management literature, going beyond mere economic considerations to integrate social, societal and environmental objectives. From this perspective, CSR represents an application of sustainable development within companies, historically perceived as guided solely by the logic of profit. Among the many studies devoted to CSR, a major focus is on its impact on financial performance, although the debate remains open. Research findings to date remain heterogeneous, leaving room for ongoing discussion and justifying further study of this impact. The accumulation of knowledge has not yet led to the development of a unified theoretical framework, nor to a convergence of empirical findings. This article builds on existing theoretical work and explores, through critical analysis, the relationship between CSR, as measured by Corporate Social Performance (CSP), and Corporate Financial Performance (CFP).

CSR and Sustainable Environmental Performance: An Exploration of Mediating and Moderating Factors

Taking into consideration the moderating role of perceived organizational support within the framework of the natural resource-based view (RBV) theory, the purpose of this study is to investigate the connection between corporate social responsibility (CSR) and sustainable environmental performance. Specifically, this study focuses on the roles that green capability and green transformational leadership play as mediators in this relationship. Through the use of a survey questionnaire, information was collected from 420 employees working for small- and medium-sized enterprises (SMEs) in Bangladesh. The data were analyzed with the help of AMOS and SPSS. The findings indicate that the level of CSR has a significant impact on the performance of sustainable environmental practices. To a large extent, green capability and green transformational leadership serve as mediators in the relationship between CSR and sustainable environmental performance. Furthermore, perceived organizational support plays a significant role in moderating the relationship between CSR and sustainable environmental performance. The relationship between green transformational leadership and sustainable environmental performance is also significantly moderated by perceived organizational support. This is a significant contributor to the connection. This multidimensional corporate social responsibility model can be used to assess sustainable environmental performance in both industrialized and developing countries, and it can also be extended to other service sectors, according to the theoretical conclusion that can be drawn from the research. This research demonstrates that there is a direct connection between corporate social responsibility and sustainable environmental performance. As a result, practitioners are able to develop strategies that are effective in terms of corporate social responsibility. These findings should be taken into consideration by policymakers and managers who are dedicated to promoting equitable development of the country.

Forging Sustainable Development: Exploring the Impact of Green Initiatives and Corporate Social Responsibility

In today's industrial landscape, businesses are increasingly recognizing the importance of integrating environmentally sustainable strategies to maintain competitiveness considering escalating environmental concerns. This study investigates the relationship between green practices, corporate social responsibility (CSR), managerial support, and sustainable business performance within Pakistan's service sector. Grounded in the resource-based view and stakeholder theory, the research employs a quantitative approach, surveying 506 participants across managerial levels from service sector. The findings underscore a positive correlation between green practices, CSR adherence, and sustainable performance. Notably, managerial support plays a pivotal role in translating green initiatives and CSR commitments into tangible sustainable outcomes. The widespread adoption of eco-friendly technologies within the service sector signifies a broader industry-wide shift towards sustainability. This study contributes valuable insights for academia, policymakers, industry professionals, and organizational leaders, shedding light on effective strategies for sustainable business practices. By aligning green initiatives with CSR objectives and leveraging managerial support, enterprises can position themselves as leaders in sustainable performance, thereby fostering value creation while addressing environmental challenges.

Executives’ green experience and corporate ESG performance: Do government subsidies matter?

This paper innovatively explores the impact of executives’ green experience on corporate environmental, social, and governance (ESG) performance, simultaneously highlights the moderating role of government subsidies. Using data on Chinese listed companies from 2009 to 2022, we find that companies hired executives with green experience perform better in ESG, and the positive effect of executives’ green experience is more pronounced in non-high-tech industries and eastern region. Specifically, education and practice experience both have contribution, and the education experience effects greater. In addition, we reveal the positive moderating role of government subsidies.

Climate transition risk and corporate environment, social and governance performance: Evidence from Chinese listed companies

AbstractUsing a sample taken from Chinese A‐share listed companies from 2010 to 2020, we explore the effect of climate transition risk on corporate environment, social and governance (ESG) performance. Our finding shows that climate transition risk promotes corporate ESG performance. In addition, we discover that equity incentives play an important positive moderating role in the above relationship. Compared with positive media tone, the positive effect of climate transition risk on corporate ESG performance is more significant under the moderating effect of a negative media tone. Further analyses find that there exists a more prominent relationship between climate transition risk and corporate ESG performance in non‐state‐owned enterprises, enterprises with more female directors, and enterprises in highly market‐oriented regions. Our findings provide a reference to improve ESG practice to achieve corporate sustainable development and provide practical suggestions for better dealing with climate transition risk.

Environmental and social performance relationships to firm efficiency: Evidence from the semiconductor industry

Escalating global demand for high-performance computing and smart devices has driven rapid expansion in the semiconductor industry. This expansion raises environmental and societal sustainability concerns among stakeholders. Although there is a growing commitment to environmental and social responsibilities by semiconductor companies, the impact of these responsibilities and initiatives on corporate performance remains unclear—especially with respect to general firm operational efficiency. Thus, this study employs a sample of 129 listed Chinese semiconductor companies and a slack-based data envelopment analysis (SBM-DEA) methodology to examine the relationship between corporate environmental and social performance and firm efficiency. We also investigate how supply chain position—an important industrial characteristic—moderates these relationships. The findings reveal that: (1) China's semiconductor industry efficiency is relatively low, particularly in the chip design sub-sector; (2) there is a positive relationship between corporate environmental performance and firm efficiency; and (3) supply chain position moderates the relationship between both corporate environmental and social performance and firm efficiency. These findings offer important implications for managers and researchers aiming to foster greater semiconductor industry sustainable development.

How does entrepreneurship promote corporate ESG performance?

Implementing ESG strategies mostly depends on entrepreneurship. The interaction between entrepreneurship and corporate environmental, social, and governance (ESG) performance is examined in this paper. It examines information from A-share listed firms between 2011 and 2022 to understand how entrepreneurship affects business ESG performance. The findings show that encouraging entrepreneurship can effectively improve business ESG performance. Furthermore, good results come from raising general factor productivity, increasing capacity for risk-taking, supporting activities connected to environmentally friendly innovation, and so on. Especially in encouraging major inventions, entrepreneurship is quite successful. Furthermore, the company's ownership and internal control degrees have different mediation effects. Companies with more degrees of internal control capacity and state ownership can intensify the sound of entrepreneurship. This paper confirms the significant impact of entrepreneurship and offers insightful analysis to guide the future development of business ESG activities.

Can corporate social performance mitigate the risk of extreme stock returns?

It is commonly believed that there exists a strong negative association between corporate social performance (CSP) and firm risk.11The authors would like to thank an anonymous reviewer for his careful reading of our manuscript and his many insightful comments and suggestions which have substantially improved the initial paper. The authors would alsolike to thank Lionel Tangy Malca and Alexandre Coureaud from HOMA Capital for fruitful and constructive discussions around the link between ESG and extremes stocks returns. To investigate the structure of this relationship, we decompose the dynamics of large U.S. company stock returns into two components: Gaussian and non-Gaussian innovations. Our findings indicate that CSP affects firm risk mainly through the non-Gaussian risk channel. In particular, it significantly reduces the magnitude of extreme returns. We find no consistent nor robust effect of CSP on the frequency of price boom and crash probability as it varies widely across industries. Last, we find no statistically significant impact of CSP on standard Gaussian volatility risk.

The Impact of Green Business Ethics and Green Financing on Sustainable Business Performance of Industries in Turkey: The Mediating Role of Corporate Social Responsibility

The purpose of this research is to understand the relationship between green business ethics, green finance, and sustainable business performance, and to evaluate the role of corporate social responsibility (CSR) in this relationship. The impact of the damage inflicted on nature’s functioning order is being felt much more strongly today. In light of these realities, companies must emphasize sustainability principles not just out of financial concerns but as a result of corporate social responsibility. In this context, focusing on the role of corporate social responsibility in sustainable business performance is the main goal of this research. Quantitative research methods, specifically the cross-sectional survey method, were employed for data collection and analysis. For this purpose, a convenience sampling method was used to select 427 white-collar employees working in industries operating in Türkiye as the sample for this study. The data collected through surveys were analyzed using the AMOS 24 statistical program. The findings underscore that green business ethics and green finance have a significant impact on corporate social responsibility and sustainable business performance. Additionally, it was determined that corporate social responsibility plays an intermediary role in shaping sustainable business performance. These findings are expected to provide an important foundation that can guide both employees and managers in developing awareness about green policies and sustainability, emphasizing the importance of green policies in working life.

Does share pledging affect corporate sustainability performance? Empirical evidence from an emerging market

Using data of Chinese A-share firms between 2010 and 2021, this paper examines whether and how share pledging affects corporate environmental, social, and governance (ESG) performance. We find that share pledging by major shareholders reduces corporate ESG performance, and this finding remains robust after various robustness tests, such as addressing endogeneity issues and using alternative measures. We also find that major shareholders' share pledging inhibits ESG performance by exacerbating short-term financial behaviors such as tunneling and earnings management and suppressing sustainable investments such as green innovation, social donations, and internal control. It suggests that firms with share pledging prioritize short-term financial activities and decrease investment in sustainable development. The heterogeneity tests show that investors focusing on long-term development, effective external monitoring, and internal governance could mitigate the negative impact of share pledging on sustainability performance. Furthermore, we find that the negative influence of share pledging on ESG performance occurs mainly in the sample in which the pledged funds are invested in entities other than the focal listed companies. Based on sustainable business development, this paper contributes to the literature on the economic consequences of share pledging. These findings are valuable and motivating for regulators and investors in their decision-making.

Does banking relationships promote environmental, social, and governance performance? Empirical evidence from A‐share listed firms in China

AbstractThis study investigates the impact of banking relationships on corporate environmental, social, and governance (ESG) performance using data from A‐share listed firms in China from 2009 to 2019. Results show that banking relationships negatively impact corporate ESG performance. Mechanism analysis finds that banking relationships increase agency costs and financial investment, thereby diminishing ESG performance. Corporate executives with banking backgrounds and banks holding firm shares dampen ESG performance, whereas firms holding bank shares do not yield significant impact on ESG performance. Our study also finds that the negative impact of banking relationships on ESG performance is mitigated by analyst attention and supervisory institutional investors.

Corporate board network and green technological innovation: a view of guanxi culture in China

ABSTRACT Given the pivotal role of guanxi as an informal arrangement for resource acquisition in China, this study integrates social capital theory with social network analysis to explore the effect of firms’ guanxi in board networks on green technological innovation (GTI). The findings suggest that firms with more stable and flexible guanxi are likely to have access to more adequate and diverse social capital to support GTI. Furthermore, we theorise that these relationships are more pronounced for firms with better corporate social responsibility performance, as this may strengthen connected firms’ trust in the focal firm and allow it to draw more GTI resources. This effect, however, only holds for non-state-owned firms. Stronger absorptive capacity also enhances the contribution of guanxi to GTI by helping firms gain more recognition from connected firms for GTI engagement, thereby positively moderating the relationships. This study may provide insights for shareholders to promote firms’ GTI.

Sustainable resource management and community corporate social performance: strategic implications of corruption control in MNEs

PurposeThe consequences of corporate corruption control (CCC) have either been investigated outside the firm (e.g. foreign direct investment inflows) or inside the firm (e.g. profitability). Yet prior research addresses these implications separately, treating them as distinct phenomena, ignoring questions at their intersection. However, corruption control can be leveraged to benefit both organizations (internally) and environments (externally). In line with open systems theory, this study aims to explore a ripple effect of corruption control not only inside organizations (efficiency through adoption of sustainable resource management practices) but also outside [community-centered corporate social performance (CSP)].Design/methodology/approachUsing a longitudinal sample of multinational enterprises from Forbes list of “The World’s Largest Public Companies,” the authors use a cross-lagged panel design to provide clarity regarding causal effects.FindingsResults confirm causal directionality and support the positive effect of corruption control on resource management and community CSP, contributing toward understanding implications at the organization–environment interface.Originality/valueThe authors examine both internal and external implications of CCC. The use of a cross-lagged design that is relatively novel to the management field allows to check for casual effects between CSP elements that were previously assumed to have reciprocal casual effects.

Green public procurement and corporate environmental performance: An empirical analysis based on data from green procurement contracts

Green public procurement (GPP) is regarded as a vital tool for achieving energy conservation and emission reduction. This policy aims to guide enterprises towards cleaner production by creating market demand for green products on the demand side. However, it remains unclear whether GPP can genuinely improve corporate environmental performance. This study reviews relevant policy documents and constructs a wordlist of “green procurement contract" using the Word2vec model. By employing text analysis, we identify public procurement contracts that meet green standards. Subsequently, we match these contracts with data from China's A-share-listed companies to empirically test the impact of GPP contracts on corporate environmental performance. The findings reveal that GPP significantly enhances corporate environmental performance, primarily through conceptual governance effects, source governance effects, terminal governance effects, and supervision governance effects. Heterogeneity analysis indicates that this environmental incentive effect is particularly significant among non-state-owned enterprises and small and medium-sized enterprises. Additionally, the effect is more pronounced in regions with high government environmental awareness and moderate environmental enforcement intensity. Further analysis shows that GPP also improves corporate social responsibility performance and promotes corporate ESG performance, thereby fostering sustainable development. Moreover, the study points out that increasing the transparency of information disclosure, enhancing procurement efficiency, and maintaining the stability of procurement relationships all contribute to strengthening the environmental performance incentive effect of GPP. This article helps to deepen the understanding of the “proactive government” promoting the development of green economy and also provides theoretical reference for the breakthrough of corporate green transformation under the target of “dual carbon.”

CEO Benevolence and Corporate Social Performance

The involvement of corporate CEOs/directors in not‐for‐profit (NFP) leadership is significant for corporate and NFP sectors. We refer to this activity as ‘benevolence’. These benevolent leaders bring synergistic effects to each leadership position. Although research has examined various characteristics of NFPs and corporate leaders independently, the impact of this combination of serving NFPs and listed firms is worth examining, given current debates on the form and function of stakeholder capitalism. We provide preliminary exploration of NFP leadership positions of CEOs/directors, from 2010 to 2019. Data were hand‐collected from CEO/director biographies in annual reports. NFP roles were verified through public sources (e.g., Australian Charities and Not‐For‐Profit Commission). We identify meaningful patterns in NFP leadership positions held by the those in the top echelons. In evaluating whether benevolent leaders influence corporate ethical outcomes, we find a significant positive association. Our findings establish the foundation for future inquiries on the influence of benevolent leaders on many corporate outcomes.

Corporate social initiatives and wealth creation for firms-an empirical examination

Purpose This study aims to examine whether social initiatives adopted by firms lead to improved financial performance. The authors analyse the impact of different elements of social initiatives on wealth creation for firms in terms of operating and market performance. Design/methodology/approach The study is based on the social initiative scores of over 4,500 firms collected from Thomson Reuters' ESG database. The study uses two-stage least squares (2SLS) to analyse the relationship between social initiatives and firm performance. Findings Profitable, mature, capital intensive and firms with high sales growth rate tend to invest more in social initiatives. Firms with high agency costs invest in social initiatives for workforce efficiency, maintaining human rights and product responsibility. The study documents evidence that social investments are value creating mechanism for firms which leads to improved financial performance in terms of operating and stock market performance. Firms with high dividend intensity invest in social initiatives for workforce welfare and human rights initiatives. Investment in employee well-being and community initiatives results in intangible benefits such as improved stock market valuation. Practical implications The research model has not considered the impact of intervening variables to understand the relationship between corporate social performance and corporate financial performance. Social implications Firms ought to recognize that social investment is beneficial in terms of value creation of firms as stock market perceive such investments favourably. Firms must focus more on community development initiatives and workforce initiatives for the value creation of firms compared to investments directed towards human rights initiatives and product responsibility initiatives. Originality/value This study focusses exclusively on the social dimension of the CSR activities. The authors examine the impact of social welfare scores on firm performance by analysing the valuation effects on scores representing workforce, human rights, community and product responsibility. Moreover, the paper also examines the impact of a new dimension of product responsibility on firm performance. They also focus on both aspects of financial performance in terms of operating performance (proxied by ROE) and the joint impact of both operating and market performance (proxied by Tobin’s Q). This paper contributes to the research on the linkage of social performance to financial performance by observing that firms with high agency cost characteristics tend to invest in social initiatives for work force efficiency, maintaining human rights and product responsibility.