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The Real Effects of Mandatory Corporate Social Responsibility Reporting in China
Author(s) -
Lu Tong,
Sivaramakrishnan Konduru,
Wang Yanyan,
Yu Lisheng
Publication year - 2021
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/poms.13334
Subject(s) - profitability index , corporate social responsibility , business , mandate , shareholder , accounting , china , sample (material) , core (optical fiber) , state ownership , control (management) , state (computer science) , corporate governance , finance , emerging markets , economics , public relations , chemistry , materials science , management , chromatography , political science , law , composite material , algorithm , computer science
We investigate the real effects of corporate social responsibility (CSR) reporting regulation enacted in China in 2008 covering both state‐owned enterprises (SOEs) and non‐state‐owned enterprises (NSOEs). As the CSR reporting requirement applies only to select firms, the regulation presents a unique setting that provides us with a suitable control sample of firms not subject to the regulation. Using a difference‐in‐differences approach, we document that relative to firms that are not affected by the regulation, NSOEs and SOEs with low state ownership subject to the mandate are associated with increases in CSR expenditures. Moreover, the real effects manifest in non‐core initiatives for these firms, whereas they manifest in core operating activities for SOEs with high state ownership. Finally, the effects of the mandatory CSR reporting on profitability and shareholder value are negative.