The Analyst Lens: How CSR Catalyzes Corporate Value in China
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i6.4666
Abstract
Using a panel of 20,947 firm-year observations from Chinese A-share listed firms (2010-2020), we apply high-dimensional fixed effects models controlling for time, industry, and province effects. Results show CSR coefficients of 0.052 (p<0.01) for ROA and 0.4 (p<0.01) for Tobin's Q. Analyst attention mediates these effects, with indirect effects of 0.01 for ROA and 0.326 for Tobin's Q. Heterogeneity analysis reveals stronger effects in non-state-owned and high-pollution firms. Robustness and endogeneity tests further substantiate these conclusions, confirming the varying impact of CSR depending on firms’ property rights and environmental status.
Keywords
corporate social responsibility, analyst attention, corporate performance
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[3] Boubaker, S.; Cellier, A.; Manita, R.; Saeed, A. Does Corporate Social Responsibility Reduce Financial Distress Risk? Economic Modelling 2020, 91, 835–851, doi:10.1016/j.econmod.2020.05.012.
[4] Gangi, F.; Meles, A.; Monferrà, S.; Mustilli, M. Does Corporate Social Responsibility Help the Survivorship of SMEs and Large Firms? Global Finance Journal 2020, 43, 100402, doi:10.1016/j.gfj.2018.01.006.
[5] Qiu, S. (Charles); Jiang, J.; Liu, X.; Chen, M.-H.; Yuan, X. Can Corporate Social Responsibility Protect Firm Value during the COVID-19 Pandemic? International Journal of Hospitality Management 2021, 93, 102759, doi:10.1016/j.ijhm.2020.102759.
[6] Aerts, W.; Cormier, D.; Magnan, M. The Association Between Web‐Based Corporate Performance Disclosure and Financial Analyst Behaviour Under Different Governance Regimes. Corporate Governance 2007, 15, 1301–1329, doi:10.1111/j.1467-8683.2007.00648.x.
[7] Naqvi, S.K.; Shahzad, F.; Rehman, I.U.; Qureshi, F.; Laique, U. Corporate Social Responsibility Performance and Information Asymmetry: The Moderating Role of Analyst Coverage. Corp Soc Responsibility Env 2021, 28, 1549–1563, doi:10.1002/csr.2114.
[8] Hinze, A.-K.; Sump, F. Corporate Social Responsibility and Financial Analysts: A Review of the Literature. SAMPJ 2019, 10, 183–207, doi:10.1108/SAMPJ-05-2017-0043.
[9] Barauskaite, G.; Streimikiene, D. Corporate Social Responsibility and Financial Performance of Companies: The Puzzle of Concepts, Definitions and Assessment Methods. Corp Soc Responsibility Env 2021, 28, 278–287, doi:10.1002/csr.2048.
[10] Wang, Y.; Liu, J.; Sui, X.; Liu, L. Does Corporate Social Responsibility Improve Financial Performance? -Evidence from Pure Green Side. Finance Research Letters 2020, 36, 101522, doi:10.1016/j.frl.2020.101522.
[11] Wang, Y.; Tai, P.; Pang, M. Corporate Social Responsibility and Corporate Fraud: The Mediating Effect of Analyst Attention. Finance Research Letters 2024, 64, 105370, doi:10.1016/j.frl.2024.105370.
[12] Zaman, R.; Jain, T.; Samara, G.; Jamali, D. Corporate Governance Meets Corporate Social Responsibility: Mapping the Interface. Business & Society 2022, 61, 690–752, doi:10.1177/0007650320973415.
[13] Aftab, J.; Abid, N.; Sarwar, H.; Amin, A.; Abedini, M.; Veneziani, M. Does Corporate Social Responsibility Drive Financial Performance? Exploring the Significance of Green Innovation, Green Dynamic Capabilities, and Perceived Environmental Volatility. Corp Soc Responsibility Env 2024, 31, 1634–1653, doi:10.1002/csr.2654.
[14] Aydoğmuş, M.; Gülay, G.; Ergun, K. Impact of ESG Performance on Firm Value and Profitability. Borsa Istanbul Review 2022, 22, S119–S127, doi:10.1016/j.bir.2022.11.006.
[15] Wong, W.C.; Batten, J.A.; Ahmad, A.H.; Mohamed-Arshad, S.B.; Nordin, S.; Adzis, A.A. Does ESG Certification Add Firm Value? Finance Research Letters 2021, 39, 101593, doi:10.1016/j.frl.2020.101593.
[16] Broadstock, D.C.; Chan, K.; Cheng, L.T.W.; Wang, X. The Role of ESG Performance during Times of Financial Crisis: Evidence from COVID-19 in China. Finance Research Letters 2021, 38, 101716, doi:10.1016/j.frl.2020.101716.
[17] Bradshaw, M.; Ertimur, Y.; O’Brien, P. Financial Analysts and Their Contribution to Well-Functioning Capital Markets. ACC 2017, 11, 119–191, doi:10.1561/1400000042.
[18] Kelly, B.; Ljungqvist, A. Testing Asymmetric-Information Asset Pricing Models. The Review of Financial Studies 2012, 25, 1366–1413, doi:10.1093/rfs/hhr134.
[19] Loh, R.K.; Stulz, R.M. Is Sell‐Side Research More Valuable in Bad Times? The Journal of Finance 2018, 73, 959–1013, doi:10.1111/jofi.12611.
[20] Coelho, R.; Jayantilal, S.; Ferreira, J.J. The Impact of Social Responsibility on Corporate Financial Performance: A Systematic Literature Review. Corp Soc Responsibility Env 2023, 30, 1535–1560, doi:10.1002/csr.2446.
[21] Kim, M.; Yin, X.; Lee, G. The Effect of CSR on Corporate Image, Customer Citizenship Behaviors, and Customers’ Long-Term Relationship Orientation. International Journal of Hospitality Management 2020, 88, 102520, doi:10.1016/j.ijhm.2020.102520.
[22] Eccles, R.G.; Serafeim, G.; Seth, D.; Chu Yee Ming, C. The Performance Frontier: Innovating for a Sustainable Strategy: Interaction. Harvard business review 2013, 91, 17–18.
[23] Wang, H.; Tong, L.; Takeuchi, R.; George, G. Corporate Social Responsibility: An Overview and New Research Directions: Thematic Issue on Corporate Social Responsibility. AMJ 2016, 59, 534–544, doi:10.5465/amj.2016.5001.
[24] Wang, C.; Zhang, Q.; Zhang, W. Corporate Social Responsibility, Green Supply Chain Management and Firm Performance: The Moderating Role of Big-Data Analytics Capability. Research in Transportation Business & Management 2020, 37, 100557, doi:10.1016/j.rtbm.2020.100557.
[25] Tenuta, P.; Cambrea, D.R. Corporate Social Responsibility and Corporate Financial Performance: The Role of Executive Directors in Family Firms. Finance Research Letters 2022, 50, 103195, doi:10.1016/j.frl.2022.103195.
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