Corporate social responsibility and firm value: evidence from Chinese targeted poverty alleviation
Corporate social responsibility and firm value: evidence from Chinese targeted poverty alleviation
Purpose: Whilst the relationship between corporate social responsibility (CSR) and corporate financial performance has been well documented, CSR has rarely been studied from the perspective of corporate poverty alleviation. This study aims to test whether participation in targeted poverty alleviation (TPA) affects firms' market value and to explore how the magnitudes of market value vary in different CSR environments. Design/methodology/approach: Based on recent Chinese TPA initiatives and on 108 TPA announcements of Chinese-listed firms from 2016 to 2020, this study adopts an event study method to investigate the impact of firm's TPA announcements on the firm's market value. Then, the authors construct a cross-sectional regression to analyse different CSR factors that may affect market reactions. Findings: The results demonstrate that TPA announcements can increase a firm's overall market value. Additionally, the results show that TPA way and firm ownership significantly moderate the market reaction, namely the positive reaction is more significant when the TPA announcements involve charity poverty alleviation rather than industrial poverty alleviation and for privately owned firms rather than state-owned firms. Practical implications: The empirical results help TPA practitioners obtain a nuanced understanding of whether and when to participate in poverty alleviation is worthwhile. This study also provides a reference for poverty alleviation work in countries with similar backgrounds. Originality/value: This study not only provides empirical evidence for the consequences of poverty alleviation behaviour of firms in developing countries, but also complements the field of CSR research in developed countries.
Abnormal returns, Charity poverty alleviation, Corporate social responsibility, Industrial poverty alleviation, Targeted poverty alleviation
3255-3274
Huang, Heshu
c99925c4-4fa3-48d7-8e35-ed56a9c407c9
Shang, Ruotong
2b2a0c9c-930c-46c5-bdab-f596ee550cfa
Wang, Liukai
1ea2c3e6-95e6-4912-952a-54a53e2da059
Gong, Yu
86c8d37a-744d-46ab-8b43-18447ccaf39c
31 May 2022
Huang, Heshu
c99925c4-4fa3-48d7-8e35-ed56a9c407c9
Shang, Ruotong
2b2a0c9c-930c-46c5-bdab-f596ee550cfa
Wang, Liukai
1ea2c3e6-95e6-4912-952a-54a53e2da059
Gong, Yu
86c8d37a-744d-46ab-8b43-18447ccaf39c
Huang, Heshu, Shang, Ruotong, Wang, Liukai and Gong, Yu
(2022)
Corporate social responsibility and firm value: evidence from Chinese targeted poverty alleviation.
Management Decision, 60 (12), .
(doi:10.1108/MD-07-2021-0993).
Abstract
Purpose: Whilst the relationship between corporate social responsibility (CSR) and corporate financial performance has been well documented, CSR has rarely been studied from the perspective of corporate poverty alleviation. This study aims to test whether participation in targeted poverty alleviation (TPA) affects firms' market value and to explore how the magnitudes of market value vary in different CSR environments. Design/methodology/approach: Based on recent Chinese TPA initiatives and on 108 TPA announcements of Chinese-listed firms from 2016 to 2020, this study adopts an event study method to investigate the impact of firm's TPA announcements on the firm's market value. Then, the authors construct a cross-sectional regression to analyse different CSR factors that may affect market reactions. Findings: The results demonstrate that TPA announcements can increase a firm's overall market value. Additionally, the results show that TPA way and firm ownership significantly moderate the market reaction, namely the positive reaction is more significant when the TPA announcements involve charity poverty alleviation rather than industrial poverty alleviation and for privately owned firms rather than state-owned firms. Practical implications: The empirical results help TPA practitioners obtain a nuanced understanding of whether and when to participate in poverty alleviation is worthwhile. This study also provides a reference for poverty alleviation work in countries with similar backgrounds. Originality/value: This study not only provides empirical evidence for the consequences of poverty alleviation behaviour of firms in developing countries, but also complements the field of CSR research in developed countries.
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10-1108_MD-07-2021-0993
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Accepted/In Press date: 10 May 2022
e-pub ahead of print date: 31 May 2022
Published date: 31 May 2022
Additional Information:
Funding Information:
The authors gratefully acknowledge financial support from the China Postdoctoral Science Foundation (No. 2021M700380), the National Natural Science Foundation of China (No. 71729001, 72025101), the Humanity and Social Science Foundation of Ministry of Education of China (No. 20YJA630024) and the Fundamental Research Funds for the Central Universities (No. FRF-DF-20-11).
Publisher Copyright:
© 2022, Emerald Publishing Limited.
Keywords:
Abnormal returns, Charity poverty alleviation, Corporate social responsibility, Industrial poverty alleviation, Targeted poverty alleviation
Identifiers
Local EPrints ID: 468397
URI: http://eprints.soton.ac.uk/id/eprint/468397
ISSN: 0025-1747
PURE UUID: 72c98863-abc8-41a5-8937-f4270269b88b
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Date deposited: 12 Aug 2022 21:17
Last modified: 06 Jun 2024 04:06
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Contributors
Author:
Heshu Huang
Author:
Ruotong Shang
Author:
Liukai Wang
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