Suchergebnisse

AbstractWe explore the relations among executive compensation, internal control quality (ICQ), and corporate social responsibility (CSR), focusing on improving the CSR outcomes of listed firms in China. Our findings are fourfold. First, we document that executive compensation and ICQ have a significant positive impact on CSR. Second, we find that executive compensation positively affects ICQ; hence, we identify ICQ as a channel that can further improve the impact of executive compensation on CSR. Third, we discover that the documented effects are stronger in state‐owned firms than in non‐state‐owned firms. Fourth, we observe that regulatory changes have both positive and negative impacts on CSR. Our findings are less vulnerable to endogeneity and have key implications for policy makers.

AbstractUsing a large panel of listed firms in China from 2010 to 2015, this study investigates the valuation effect of corporate environmental responsibility (CER) and firm characteristics that influence such an effect. We implement the ordinary least squares and the fixed effects panel regressions as well as the two‐stage least squares regressions that control for potential endogeneity. We find that CER has a significantly positive effect on firm performance. The positive effect is more pronounced for firms in highly polluting industries, with high asset tangibility and with low state ownership. Furthermore, firms with high ownership concentration and low managerial ownership tend to benefit more from their environmentally responsible activities, suggesting that enhanced environmental engagement may serve as a strategic tool in reducing the negative effects of agency cost and weak corporate governance on firm valuation. Our results are robust to alternative measures of performance (Tobin's Q and return on assets).