Corporate Social Responsibility Practices, Corporate Sustainable Development, Venture Capital and Corporate Governance: Evidence from Chinese Public Listed Firms
Main Article Content
Abstract
This study intends to investigate the relationship between the different corporate social responsibility (CSR) practices of firms and their corporate sustainable development (CSD) as well as whether venture capital (VC) and corporate governance (CG) moderate this relationship and capital allocation efficiency (CAE) mediates the relationship. The sample of this study consist of Chinese A-share public-listed firms as well as the Growth Enterprise Market (GEM) listed firms in China. The duration covered is from 2013 to 2020. There are significant positive relationships between CSR and CSD among Chinese A-shares listed firms and GEM listed firms. In addition, there is a significant positive moderating effect of CG and no significant moderating effect of VC on the relationship between CSR and CSD among Chinese A-shares listed firms. However, for GEM listed firms, there is no significant moderating effect of both VC and CG on the relationship between CSR and CSD. Finally, there is a significant positive mediating effect of CAE on the relationship between CSR and CSD among Chinese A-shares listed firms and GEM listed firms.
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Achim, M. V., Borlea, S. N., & Mare, C. (2016). Corporate governance and business performance: Evidence for the Romanian economy. Journal of Business Economics and Management, 17(3), 458–474. https://doi.org/10.3846/16111699.2013.834841
Adinehzadeh, R., Jaffar, R., Shukor, Z. A., & Abdul Rahman, M. R. C. (2018). The mediating role of environmental performance on the relationship between corporate governance mechanisms and environmental disclosure. Asian Academy of Management Journal of Accounting and Finance, 14(1),153–183. https://doi.org/10.21315/aamjaf2018.14.1.7
Afrifa, G. A., & Tauringana, V. (2015). Corporate governance and performance of UK listed small and medium enterprises. Corporate Governance, 15(5), 719–733. https://doi.org/10.1108/CG-03-2015-0029
Aivazian, V. A., Ge, Y., & Qiu, J. (2005). The impact of leverage on firm investment: Canadian evidence. Journal of Corporate Finance, 11(1–2), 277–291. https://doi.org/10.1016/S0929-1199(03)00062-2
Altuner, D., Çelik, S., & Güleç, T. (2015). The linkages among intellectual capital, corporate governance and corporate social responsibility. Corporate Governance: The International Journal of Business in Society, 19, 491–507. https://doi.org/10.1108/CG-04-2014-0044
Amor, S. B., & Kooli, M. (2020). Do M&A exits have the same effect on venture capital reputation than IPO exits? Journal of Banking & Finance, 111, 105704. https://doi.org/10.1016/j.jbankfin.2019.105704
Atif, M., Alam, M. S., & Islam, M. S. (2023). Firm?level energy and carbon performance: Does sustainable investment matter? Business Strategy and the Environment, 32(4), 2275–2295. https://doi.org/10.1002/bse.3248
Avotra, A. A. R. N., Chenyun, Y., Yongmin, W., Lijuan, Z., & Nawaz, A. (2021). Conceptualizing the state of the art of corporate social responsibility (CSR) in green construction and its nexus to sustainable development. Frontiers in Environmental Science, 9, 541. https://doi.org/10.3389/fenvs.2021.774822
Bao, C., Yu, Z., Yin, X., Chen, Z., Meng, L., Yang, W., & Chen, K. (2018). The development of the social health scale for the elderly. Health and Quality of Life Outcomes, 16(1), 67. https://doi.org/10.1186s12955-018-0899-6
Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173. https://doi.org/10.1037/0022-3514.51.6.1173
Belas, J., Škare, M., Gavurova, B., Dvorsky, J., & Kotaskova, A. (2022). The impact of ethical and CSR factors on engineers’ attitudes towards SMEs sustainability. Journal of Business Research, 149, 589–598. https://doi.org/10.1016/j.jbusres.2022.05.056
Bhandari, A., & Javakhadze, D. (2017). Corporate social responsibility and capital allocation efficiency. Journal of Corporate Finance, 43, 354–377. https://doi.org/10.1016/j.jcorpfin.2017.01.012
Boubaker, S., Cellier, A., Manita, R., & Saeed, A. (2020). Does corporate social responsibility reduce financial distress risk? Economic Modelling, 91, 835–851. https://doi.org/10.1016/j.econmod.2020.05.012
Carrasco-Monteagudo, I., & Buendia-Martinez, I. (2013). Corporate social responsibility: A crossroad between changing values, innovation and internationalisation. European Journal of International Management, 7(3), 295–314. https://doi.org/10.1504/EJIM.2013.054327
Chen, J. (2023). Venture capital research in China: Data and institutional details. Journal of Corporate Finance, 81, 102239. https://doi.org/10.1016/j.jcorpfin.2022.102239
Chomvilailuk, R., & Butcher, K. (2023). Enhancing employee advocacy of the firm’s corporate social responsibility (CSR) activities. Asia-Pacific Journal of Business Administration, ahead-of-print. https://doi.org/10.1108/APJBA-09-2022-0415
Ciccullo, F., Pero, M., & Patrucco, A. S. (2023). Designing circular supply chains in start-up companies: Evidence from Italian fashion and construction start-ups. The International Journal of Logistics Management, 34(3), 553–581. https://doi.org/10.1108/IJLM-04-2022-0158
Cook, K. A., Romi, A. M., Sánchez, D., & Sánchez, J. M. (2019). The influence of corporate social responsibility on investment efficiency and innovation. Journal of Business Finance & Accounting, 46(3–4), 494–537. https://doi.org/10.1111/jbfa.12360
Crisan-Mitra, C., Dinu, V., Postelnicu, C., & Dabija, D. C. (2016). Corporate practice of sustainable development on an emerging market. Transformations in Business and Economics, 151(37), 228–243.
Cui, X., Xu, N., Yan, X., & Zhang, W. (2023). How does social credit system constructions affect corporate carbon emissions? Empirical evidence from Chinese listed companies. Economics Letters, 231, 111309. https://doi.org/10.1016/j.econlet.2023.111309
Donaldson, T., & Dunfee, T. W. (2002). Ties that bind in business ethics: Social contracts and why they matter. Journal of Banking and Finance, 26(9), 1853–1865. https://doi.org/10.1016/S0378-4266(02)00195-4
Duppati, G., Kijkasiwat, P., Hunjra, A. I., & Liew, C. Y. (2023). Do institutional ownership and innovation influence idiosyncratic risk? Global Finance Journal, 56, 100770. https://doi.org/10.1016/j.gfj.2022.100770
Esan, O. M., Nwobu, O., Adeyanju, I. T., & Adeyemi, J. O. (2022). Firm value response to internal and external corporate governance in the Nigerian stock market. Asian Economic and Financial Review, 12(4), 227–243. https://doi.org/10.55493/5002.v12i4.4465
Fonseka, M. M., Ramos, C. G., & Tian, G. L. (2012). The most appropriate sustainable growth rate model for managers and researchers. Journal of Applied Business Research, 28(3), 481–500. https://doi.org/10.19030/jabr.v28i3.6963
Franco, S., Caroli, M. G., Cappa, F., & Del Chiappa, G. (2020). Are you good enough? CSR, quality management and corporate financial performance in the hospitality industry. International Journal of Hospitality Management, 88, 102395. https://doi.org/10.1016/j.ijhm.2019.102395
Freeman, R. E., Dmytriyev, S. D., & Phillips, R. A. (2021). Stakeholder theory and the resource-based view of the firm. Journal of Management, 47(7), 1757–1770. https://doi.org/10.1177/0149206321993576
Fu, Y., & Ng, S. H. (2020). Local bias and performance of venture capital institutions: Evidence from the Chinese venture capital market. Journal of Asia Business Studies, 15(1), 174–197. https://doi.org/10.1108/JABS-12-2019-0366
Gao, Y., Gao, S., Zhou, Y., & Huang, K. F. (2015). Picturing firms’ institutional capital based radical innovation under China’s institutional voids. Journal of Business Research, 68(6), 1166–1175. https://doi.org/10.1016/j.jbusres.2014.11.011
Gompers, P. A. (1996). Grandstanding in the venture capital industry. Journal of Financial Economics, 42(1), 133–156. https://doi.org/10.1016/0304-405X(96)00874-4
Guo, L., Wei, Y. S., Sharma, R., & Rong, K. (2017). Investigating e-business models’ value retention for start-ups: The moderating role of venture capital investment intensity. International Journal of Production Economics, 186, 33–45. https://doi.org/10.1016/j.ijpe.2017.01.021
He, C., Lu, J., & Qian, H. (2019). Entrepreneurship in China. Small Business Economics, 52, 563–572. https://doi.org/10.1007/s11187-017-9972-5
Helm, R., & Mark, A. (2012). Analysis and evaluation of moderator effects in regression models: State of art, alternatives and empirical example. Review of Managerial Science, 6, 307–332. https://doi.org/10.1007/s11846-010-0057-y
Imai, K., & Kim, I. S. (2021). On the use of two-way fixed effects regression models for causal inference with panel data. Political Analysis, 29(3), 405–415. https://doi.org/10.1017/pan.2020.33
Jia, C., Tang, X., & Kan, Z. (2020). Does the nation innovation system in China support the sustainability of small and medium enterprises (SMEs) innovation? Sustainability, 12(6), 2562. https://doi.org/10.3390/su12062562
Katti, S., & Raithatha, M. (2020). Impact of venture capital investment on firm performance: An Indian evidence. Global Business Review, 21(4), 1011–1024. https://doi.org/10.1177/0972150918779165
Khediri, K. B. (2021). CSR and investment efficiency in Western European countries. Corporate Social Responsibility and Environmental Management, 28(6), 1769–1784. https://doi.org/10.1002/csr.2151
Li, J. J., Xu, C., Fung, H. G., & Chan, K. C. (2021). Do venture capital firms promote corporate social responsibility? International Review of Economics and Finance, 71, 718–732. https://doi.org/10.1016/j.iref.2020.10.012
Liew, C. Y., & Devi, S. S. (2022). Independent directors’ tenure, expropriation, related party transactions, and firm value: The role of ownership concentration in Malaysian publicly listed corporations. In Information Resouces Management Association (Ed.), Research anthology on strategies for maintaining successful family firms (pp. 369–394). Hershey, PA: IGI Global. https://doi.org/10.4018/978-1-6684-3550-2.ch016
Liew, C. Y., & Devi, S. S. (2021). Family firms, banks and firm value: Evidence from Malaysia. Journal of Family Business Management, 11(1), 51–85. https://doi.org/10.1108/JFBM-03-2019-0015
Liew, C. Y., Ko, Y. K., Song, B. L., & Murthy, S. T. (2021). Directors’ remuneration, expropriation and firm performance in Malaysia: evidence from non-executive directors’ service duration within the remuneration committee. International Journal of Business and Globalisation, 28(1–2), 117–147. https://doi.org/10.1504/IJBG.2021.115300
Liu, T., Liu, W., Elahi, E., & Liu, X. (2022). Supply chain finance and the sustainable growth of Chinese firms: The moderating effect of digital finance. Frontiers in Environmental Science, 10, 922182. https://doi.org/10.3389/fenvs.2022.922182
Lopez, B., Rangel, C., & Fernández, M. (2022). The impact of corporate social responsibility strategy on the management and governance axis for sustainable growth. Journal of Business Research, 150, 690–698. https://doi.org/10.1016/j.jbusres.2022.06.025
Lu, H., Tan, Y., & Huang, H. (2013). Why do venture capital firms exist: An institution based rent-seeking perspective and Chinese evidence. Asia Pacific Journal of Management, 30, 921–936. https://doi.org/10.1007/s10490-011-9262-8
Lu, H., Oh, W. Y., Kleffner, A., & Chang, Y. K. (2021). How do investors value corporate social responsibility? Market valuation and the firm-specific contexts. Journal of Business Research, 125, 14–25. https://doi.org/10.1016/j.jbusres.2020.11.063
Ludwig, P., & Sassen, R. (2022). Which internal corporate governance mechanisms drive corporate sustainability? Journal of Environmental Management, 301, 113780. https://doi.org/10.1016/j.jenvman.2021.113780
Mukherjee, T., & Sen, S. S. (2019). Intellectual capital and corporate sustainable growth: The Indian evidence. Asian Journal of Business Environment, 9(2), 5–15. https://doi.org/10.13106/jbees.2019.vol9.no2.5
Mwesigwa, R., Nabwami, R., Mayengo, J., & Basulira, G. (2020). Contractual completeness as a cornerstone to stakeholder management in public private partnership projects in Uganda. Built Environment Project and Asset Management, 10(3), 469–484. https://doi.org/10.1108/BEPAM-09-2019-0083
Nguyen, D. N., Tran, Q. N., & Truong, Q. T. (2022). The ownership concentration innovation nexus: Evidence from SMEs around the world. Emerging Markets Finance and Trade, 58(5), 1288–1307.
Pan, F., & Yang, B. (2019). Financial development and the geographies of startup cities: Evidence from China. Small Business Economics, 52, 743–758. https://doi.org/10.1007/s11187-017-9983-2
Peng, C. W. (2020). The role of business strategy and CEO compensation structure in driving corporate social responsibility: Linkage towards a sustainable development perspective. Corporate Social Responsibility and Environmental Management, 27(2), 1028–1039. https://doi.org/10.1002/csr.1863
Peng, L. S., & Isa, M. (2020). Environmental, social and governance (ESG) practices and performance in Shariah firms: agency or stakeholder theory? Asian Academy of Management Journal of Accounting and Finance, 16(1),1–34. https://doi.org/10.21315/aamjaf2020.16.1.1
Sabbaghi, O. (2016). Corporate governance in China: A review. Corporate Governance International Journal of Business in Society, 16(5), 866–882. https://doi.org/10.1108/CG-12-2015-0162
Safi, A., Chen, Y., Qayyum, A., Wahab, S., & Amin, M. (2023). How does corporate social and environmental responsibility contribute to investment efficiency and performance? Evidence from the financial sector of China. Economic Research-Ekonomska Istraživanja, 36(2), 2142816. https://doi.org/10.1080/1331677X.2022.2142816
Siltaloppi, J., Rajala, R., & Hietala, H. (2021). Integrating CSR with business strategy: A tension management perspective. Journal of Business Ethics, 174, 507–527. https://doi.org/10.1007/s10551-020-04569-3
Staiger, D., & Stock, J. H. (1997). Instrumental variables regression with weak instruments. Econometrica, 65(3), 557–586. https://doi.org/10.2307/2171753
Sun, W., Zhao, Y., & Sun, L. (2020). Big data analytics for venture capital application: Towards innovation performance improvement. International Journal of Information Management, 50, 557–565. https://doi.org/10.1016/j.ijinfomgt.2018.11.017
Tarigan, J., Susanto, A. R. S., Hatane, S. E., Jie, F., & Foedjiawati, F. (2021). Corporate social responsibility, job pursuit intention, quality of work life and employee performance: Case study from Indonesia controversial industry. Asia-Pacific Journal of Business Administration, 13(2), 141–158. https://doi.org/10.1108/APJBA-09-2019-0189
Ul Ain, Q., Yuan, X., Mustansar Javaid, H., & Naeem, M. (2022). Board gender diversity and sustainable growth rate: Chinese evidence. Economic Research, 35(1), 1364–1384. https://doi.org/10.1080/1331677X.2021.1965002
Vagin, S. G., Kostyukova, E. I., Spiridonova, N. E., & Vorozheykina, T. M. (2022). Financial risk management based on corporate social responsibility in the interests of sustainable development. Risks, 10(2), 1–13. https://doi.org/10.3390/risks10020035
Wang, X., Zhang, Z., & Chun, D. (2021). The influencing mechanism of internal control effectiveness on technological innovation: CSR as a mediator. Sustainability, 13(23), 13122. https://doi.org/10.3390/su132313122
Wintoki, M. B., Linck, J. S., & Netter, J. M. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105(3), 581–606. https://doi.org/10.1016/j.jfineco.2012.03.005
Wöhler, J., & Haase, E. (2022). Exploring investment processes between traditional venture capital investors and sustainable start-ups. Journal of Cleaner Production, 377, 134318. https://doi.org/10.1016/j.jclepro.2022.134318
Xu, X., & Li, J. (2020). Asymmetric impacts of the policy and development of green credit on the debt financing cost and maturity of different types of enterprises in China. Journal of Cleaner Production, 264, 121574. https://doi.org/10.1016/j.jclepro.2020.121574
Xue, K., Yu, M., & Xu, S. (2019). Corporate social responsibility and Chinese family owned small-and medium-sized enterprises. Social Behavior and Personality: An International Journal, 47(3), 1–14. https://doi.org/10.2224/sbp.7597
Yi, R., Wang, H., Lyu, B., & Xia, Q. (2023). Does venture capital help to promote open innovation practice? Evidence from China. European Journal of Innovation Management, 26(1), 1–26. https://doi.org/10.1108/EJIM-03-2021-0161
Yu, W., Dai, S., Liu, F., & Yang, Y. (2023). Matching disruptive innovation paths with entrepreneurial networks: A new perspective on startups’ growth with Chinese evidence. Asian Business and Management, 22, 878–902. https://doi.org/10.1057/s41291-022-00177-3
Zhang, D., Hu, M., & Ji, Q. (2020). Financial markets under the global pandemic of COVID-19. Finance Research Letters, 36, 101528. https://doi.org/10.1016/j.frl.2020.101528
Zhang, F., Li, M., & Zhang, M. (2019a). Chinese financial market investors attitudes toward corporate social responsibility: Evidence from mergers and acquisitions. Sustainability, 11(9), 1–20. https://doi.org/10.3390/su11092615
Zhang, L., Guo, Y., & Sun, G. (2019b). How patent signals affect venture capital: The evidence of bio-pharmaceutical start-ups in China. Technological Forecasting and Social Change, 145, 93–104. https://doi.org/10.1016/j.techfore.2019.05.013
Zhang, S., Chen, C., Xu, S., & Xu, B. (2021). Measurement of capital allocation efficiency in emerging economies: Evidence from China. Technological Forecasting and Social Change, 171, 120954. https://doi.org/10.1016/j.techfore.2021.120954
Zhang, Y. (2022). Analyst coverage and corporate social responsibility decoupling: Evidence from China. Corporate Social Responsibility and Environmental Management, 29(3), 620–634. https://doi.org/10.1002/csr.2224
Zhao, M., Sun, T., & Feng, Q. (2021). Capital allocation efficiency, technological innovation and vehicle carbon emissions: Evidence from a panel threshold model of Chinese new energy vehicles enterprises. Science of The Total Environment, 784, 147104. https://doi.org/10.1016/j.scitotenv.2021.147104
Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2010). Business research methods. Cengage Learning.