The Relationship between Corporate Social Responsibility Reporting and Firm Performance and the Moderating Role of Firm Life Cycle Stages: Evidence from China
Abstract
:1. Introduction
2. Literature Review and Hypothesis Development
2.1. Firm Performance and CSR Reporting
2.2. Moderating Role of Firm Life Cycle and CSR Reporting
3. Research Methodology
3.1. Sample
3.2. Dependent Variable
3.3. Independent Variables
3.4. Moderating Variable
3.5. The Model
3.6. Control Variables
3.7. Descriptive Statistics and Correlation Analysis
3.8. Robustness Tests
3.9. Controlling the Endogeneity Issue
4. Conclusions
5. Limitations
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable | Abbreviation | Measurement |
---|---|---|
Corporate social responsibility Reporting | CSRR | CSR reporting is measured by the CSR index using a dualistic method: 1 if an item disclosed, and 0 if it not. |
Firm performance (Tobin’s Q) | TQ | Firm performance is measured by {Total assets market capitalization − book value of equity − deferred tax liability)/total assets. |
Firm life cycle (Firm AGE) | FLC | Age amongst date that firm is established and each year in the study |
Total sales growth (%) | TSG | [(Salest − Salest − 1)/(Salest − 1)] × 100 |
Total assets growth (%) | TAG | Asset growth of the firm is measured as the change in total assets. |
Return on assets | ROA | Total assets/firm profit |
Board Size | BS | Number of directors in the board |
Firm Size | FS | Total assets, size natural logarithm |
Independent Director | ID | Number of independent directors divided by total directors and multiplied by 100 |
Board shares | BS | The proportion of shares held by a firm’s board of directors |
Book-to-Market Ratio | BTMA | Book-to-market ratio of shareholders’ equity |
State-Owned Enterprises | SOE | Dichotomous variable equal to 1 if the state or government controlled firm; otherwise, 0 |
Board Meeting | BM | Number of meetings in one year |
Financial Leverage | FL | Financial leverage is calculated as total assets divided by total debt. |
CEO Duality | CD | CEO and chairman are the same position; otherwise, 0 |
Firm Growth | FG | The change in a firm’s total assets |
Year and industry dummies | YID | To control the effect of year and industry, dummies are included to control specific time and industry effects. |
Variables | Mean | SD | Min | Max | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | (12) | (13) |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(1) CSRR | 28.7 | 19.46 | 0 | 90.84 | 1.00 | ||||||||||||
(2) F performance | 2.45 | 1.94 | 0.76 | 33.67 | −0.10 * | 1.00 | |||||||||||
(3) Life Cycle | 2.01 | 0.88 | 0 | 3.25 | −0.15 * | 0.03 * | 1.00 | ||||||||||
(4) Board size | 9.48 | 2.28 | 4 | 22 | −0.15 * | 0.10 * | 0.06 * | 1.00 | |||||||||
(5) Firm Size | 23.19 | 1.74 | 18.26 | 30.81 | −0.43 * | 0.34 * | 0.18 * | 0.23 * | 1.00 | ||||||||
(6) Ind_ Director | 3.49 | 0.83 | 1 | 8 | −0.14 * | 0.13 * | 0.04 | 0.48 * | 0.31 * | 1.00 | |||||||
(7) B Shares | 19.95 | 1.12 | 17.37 | 26.61 | −0.28 * | 0.33 * | 0.13 * | 0.21 * | 0.58 * | 0.30 * | 1.00 | ||||||
(8) BTMA | 1.18 | 1.15 | 0.03 | 10.32 | −0.45 * | 0.11 * | 0.13 * | 0.09 * | 0.59 * | 0.15 * | 0.41 * | 1.00 | |||||
(9) SOE | 0.16 | 0.34 | −0.82 | 10.88 | 0.11 * | −0.02 | −0.08 * | −0.02 | 0.01 | −0.00 | −0.03 | −0.04 | 1.00 | ||||
(10) B Meeting | 10.21 | 4.79 | 1 | 57 | −0.05 * | 0.10 * | 0.05 * | 0.00 | 0.20 * | 0.04 | 0.18 * | 0.16 * | 0.11 * | 1.00 | |||
(11) Fin_ Leverage | 0.50 | 0.81 | 0.00 | 1.34 | −0.41 * | 0.09 * | 0.22 * | 0.11 * | 0.51 * | 0.14 * | 0.28 * | 0.51 * | −0.01 | 0.22 * | 1.00 | ||
(12) CEO Duality | 0.15 | 0.36 | 1 | 1 | 0.13 * | −0.03 | −0.14 * | −0.13 * | −0.10 | 0.08 * | −0.09 | −0.11 * | 0.08 * | −0.00 | −0.11 * | 1.00 | |
(13) Firm Growth | 13.83 | 9.36 | 0 | 28.62 | −0.04 | 0.06 * | −0.06 * | 0.07 * | 0.26 | 0.08 * | 0.17 | 0.11 * | 0.35 * | 0.10 * | 0.08 * | 0.01 | 1.00 |
Variables | Model 1 | Model 2 | Model 3 |
---|---|---|---|
CSRR | OLS | OLS | OLS |
FP | 0.065 *** (4.84) | -------------- | 0.062 *** (4.52) |
Firm Life Cycle | -------------- | −0.123 *** (−3.65) | −0.119 *** (−3.54) |
Interaction | -------------- | -------------- | 0.030 *** (3.19) |
Board Size | −0.085 *** (−3.74) | −0.082 *** (−3.59) | −0.083 *** (−3.61) |
Firm Size | −0.878 *** (−14.83) | −0.868 *** (−14.77) | −0.870 *** (−14.63) |
Independ Direct | 0.151 * (2.43) | 0.145 * (2.33) | 0.147 * (2.35) |
B_share | 0.603 *** (9.96) | 0.597 *** (9.85) | 0.597 *** (9.84) |
BTMA | −0.147 *** (−3.95) | −0.154 *** (−4.16) | −0.154 *** (−4.13) |
SOE | 0.542 *** (5.91) | 0.515 *** (5.27) | 0.516 *** (5.27) |
Board Meeting | 0.009 (1.54) | 0.010 (1.66) | 0.010 (1.62) |
Fin_ Leverage | −1.307 *** (−6.51) | −1.215 *** (−5.96) | −1.214 *** (−5.95) |
CEO Duality | 0.248 *** (3.06) | 0.229 *** (2.78) | 0.228 ** (2.76) |
Firm Growth | 0.011 *** (2.86) | 0.011 *** (2.87) | 0.011 *** (2.86) |
Constant | 11.568 *** (18.66) | 11.599 *** (19.16) | 11.624 *** (18.45) |
R-squared | 0.3514 | 0.3491 | 0.3492 |
Variables | Model 1 | Model 2 | Model 3 |
---|---|---|---|
CSRR | OLS | OLS | OLS |
ROA | 0.001 *** (3.61) | -------------- | 0.008 *** (3.55) |
Firm Life Cycle | -------------- | −0.125 *** (−3.67) | −0.119 ** (−3.56) |
Interaction | -------------- | -------------- | 0.000 *** (3.04) 0.002 |
Board Size | −0.0002 (−0.33) | −0.000 *** (−0.65) | −0.000 (−0.64) |
Firm Size | 0.024 *** (10.25) | 0.024 *** (14.72) | 0.025 *** (15.11) |
Independ Direct | −0.001 * (−0.86) | −0.001 * (−0.78) | −0.001 (−0.74) |
B_share | −0.016 *** (−6.68) | −0.016 *** (−9.79) | −0.017 *** (−9.92) |
BTMA | −0.012 *** (−12.91) | −0.012 *** (−11.61) | −0.012 *** (−11.91) |
SOE | 0.006 *** (1.13) | 0.006 * (2.53) | 0.007 ** (2.64) |
Board Meeting | −0.000 * (−2.28) | −0.000 (−1.96) | −0.000 * (−1.99) |
Fin_ Leverage | −0.141 *** (−16.02) | −0.142 *** (−24.93) | −0.141 *** (−24.61) |
CEO Duality | 0.005 ** (2.32) | 0.005 ** (2.36) | 0.004 * (2.07) |
Firm Growth | 0.001 *** (11.04) | 0.001 *** (13.59) | 0.001 *** (13.12) |
Constant | 10.568 *** (17.66) | 10.599 *** (17.16) | 10.624 *** (17.45) |
R-squared | 0.3585 | 0.3580 | 0.3610 |
Models | Lagged OLS | 2 SLS | ||||
---|---|---|---|---|---|---|
Variables | Model 1 | Model 2 | Model 3 | Model 4 | Model 5 | Model 6 |
CSRR | Full Sample | Full Sample | Full Sample | Full Sample | Full Sample | Full Sample |
FP | 0.011 *** (3.00) | -------------- | 0.008 *** (3.54) | 0.022 *** (3.39) | -------------- | 0.006 *** (3.52) |
Firm Life Cycle | -------------- | −0.131 *** (−3.06) 0.002 | −0.111 ** (−2.03) 0.036 | -------------- | −0.405 *** (−2.81) | −0.340 ** (2.74) 0.009 |
Interaction | -------------- | -------------- | −0.003 *** (3.03) 0.001 | -------------- | -------------- | 0.002 *** (3.01) 0.002 |
Board Size | −0.086 *** (−3.90) | −0.082 *** (−3.71) | −0.081 *** (−3.67) | −0.092 *** (−3.64) | −0.077 *** (−3.46) | −0.092 * (−1.78) |
Firm Size | −0.811 *** (−14.15) | −0.794 *** (−13.93) | −0.803 *** (−13.95) | −0.880 *** (−6.13) | −0.776 *** (−13.41) | −0.839 *** (−5.32) |
Independ Direct | 0.171 *** (2.85) | 0.163 ** (2.71) | 0.160 ** (2.65) | 0.167 ** (2.73) | 0.156 * (2.58) | 0.168 * (1.78) |
B_share | 0.538 *** (9.20) | 0.533 *** (9.09) | 0.532 *** (9.08) | 0.530 *** (8.68) | 0.520 *** (8.80) | 0.513 *** (8.23) |
BTMA | −0.166 *** (−4.67) | −0.172 *** (−4.85) | −0.169 *** (−4.72) | −0.142 * (−2.41) | −0.180 *** (−5.0) | −0.160 ** (−2.60) |
SOE | 0.513 *** (5.64) | 0.536 *** (5.74) | 0.539 ** (5.78) | 0.531 ** (5.41) | 0.509 *** (5.38) | 0.525 *** (5.06) |
Board Meeting | 0.009 (1.63) | 0.010 (1.71) | 0.010 * (1.71) | 0.007 (1.12) | 0.010 * (1.70) | 0.006 (0.57) |
Fin_ Leverage | −1.248 *** (−6.41) | −1.182 *** (−5.99) | −1.178 *** (−5.97) | −1.193 *** (−5.33) | −0.992 *** (−4.51 | −0.960 *** (−3.92) |
CEO Duality | 0.237 *** (3.02) | 0.214 ** (2.70) | 0.219 ** (2.75) | 0.249 *** (3.01) | 0.151 * (1.77) | 0.154 (1.51) |
Firm Growth | 0.013 *** (3.34) | 0.011 *** (3.00) | 0.011 *** (3.01) | 0.012 *** (3.24) | 0.010 ** (2.53) | 0.009 * (2.38) |
Constant | 10.915 *** (18.57) | 10.947 *** (18.93) | 11.117 *** (18.60) | 12.071 *** (5.27) | 11.293 *** (18.64) | 12.179 *** (5.11) |
R-squared | 0.3553 | 0.3571 | 0.3574 | 0.3376 | 0.3485 | 0.3310 |
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Jan, N.; Karn, A.L.; Li, Z.; Liu, X. The Relationship between Corporate Social Responsibility Reporting and Firm Performance and the Moderating Role of Firm Life Cycle Stages: Evidence from China. Sustainability 2021, 13, 10038. https://doi.org/10.3390/su131810038
Jan N, Karn AL, Li Z, Liu X. The Relationship between Corporate Social Responsibility Reporting and Firm Performance and the Moderating Role of Firm Life Cycle Stages: Evidence from China. Sustainability. 2021; 13(18):10038. https://doi.org/10.3390/su131810038
Chicago/Turabian StyleJan, Naveed, Arodh Lal Karn, Zeyun Li, and Xiyu Liu. 2021. "The Relationship between Corporate Social Responsibility Reporting and Firm Performance and the Moderating Role of Firm Life Cycle Stages: Evidence from China" Sustainability 13, no. 18: 10038. https://doi.org/10.3390/su131810038