Financial experts of top management teams and corporate social responsibility: evidence from China
Financial experts of top management teams and corporate social responsibility: evidence from China
This study examines how the financial experience of senior executives influences corporate social responsibility (CSR) performance and reporting activities. With a sample of Chinese listed companies over the period 2009–2018, we find that companies with senior executives with financial expertise are associated with higher CSR performance and tend to issue lengthier sustainability reports than companies without; in addition, the percentage of financial experts on the top management team (TMT) is positively related to CSR. We next find that such improvement in CSR is mainly driven by senior executives who have work experience in regulatory-oriented financial institutions. By examining the role of the TMT’s latitude of action, we find that the positive influence of senior executives’ financial experience on CSR is more pronounced in non-state-owned enterprises and in cash-abundant companies. Last, further analysis demonstrates that the enhancement in CSR driven by financially sophisticated executives drives firm value. The results are robust to alternative measures, sensitivity tests, and various controls for endogeneity concerns.
Financial experience, Top management team, Corporate social responsibility, Sustainability, Firm value
Li, Zhe
78ca3dc7-28e3-4c71-9756-9d01e56601ef
Wang, Bo
dc1fccae-55e8-4d28-8eb9-1c539247e940
Zhou, Dan
e3629dfa-35af-45e7-9c56-a9c0f47bc43f
20 June 2022
Li, Zhe
78ca3dc7-28e3-4c71-9756-9d01e56601ef
Wang, Bo
dc1fccae-55e8-4d28-8eb9-1c539247e940
Zhou, Dan
e3629dfa-35af-45e7-9c56-a9c0f47bc43f
Li, Zhe, Wang, Bo and Zhou, Dan
(2022)
Financial experts of top management teams and corporate social responsibility: evidence from China.
Review of Quantitative Finance and Accounting.
Abstract
This study examines how the financial experience of senior executives influences corporate social responsibility (CSR) performance and reporting activities. With a sample of Chinese listed companies over the period 2009–2018, we find that companies with senior executives with financial expertise are associated with higher CSR performance and tend to issue lengthier sustainability reports than companies without; in addition, the percentage of financial experts on the top management team (TMT) is positively related to CSR. We next find that such improvement in CSR is mainly driven by senior executives who have work experience in regulatory-oriented financial institutions. By examining the role of the TMT’s latitude of action, we find that the positive influence of senior executives’ financial experience on CSR is more pronounced in non-state-owned enterprises and in cash-abundant companies. Last, further analysis demonstrates that the enhancement in CSR driven by financially sophisticated executives drives firm value. The results are robust to alternative measures, sensitivity tests, and various controls for endogeneity concerns.
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RQFA_financial Experts_accepted
- Accepted Manuscript
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s11156-022-01077-5
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Accepted/In Press date: 15 May 2022
Published date: 20 June 2022
Keywords:
Financial experience, Top management team, Corporate social responsibility, Sustainability, Firm value
Identifiers
Local EPrints ID: 456936
URI: http://eprints.soton.ac.uk/id/eprint/456936
ISSN: 0924-865X
PURE UUID: 2caa77ff-e1be-4d6f-8499-c4908c82db07
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Date deposited: 17 May 2022 16:56
Last modified: 16 May 2024 04:01
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Contributors
Author:
Zhe Li
Author:
Dan Zhou
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