Finance Seminar（2018-21）

Topic: Corporate Governance, CSR Reporting Quality, and Financial Performance in Chinese Companies

Speaker: Joachim Schwalbach, Humboldt-University Berlin

Time: Friday,12 October, 10:00-11:30

Location: Room 217, Guanghua Building 2

Abstract:

The government plays a central role in spreading and promoting corporate social responsibility (CSR) in China. The true intentions of Chinese companies differ across the board and remain largely unknown, but due to the great pressure from regulatory authorities and public monitoring, CSR has now become an important concern in most Chinese companies. However, research in the field of CSR in China is limited considering the enormous size and the rapid growth of the Chinese economy. One of the most important aspects of CSR is tracking and reporting progress. With this paper, we specifically make an attempt to understand and explain how the quality of CSR disclosure and financial performance are related. We adopt a generalized structural equation modeling approach as we have panel data and suspect from simultaneity. As a proxy for the quality of CSR disclosure, we use a quality score calculated by the CSR Reporting Research Group. Our preliminary results suggest that there is a two-way causality between the quality score and financial performance. Whereas the quality score has a positive and significant impact on financial performance, financial performance has a lagged, positive and significant effect on the quality score. We also utilize a set of variables related to corporate governance and CSR, which also have a significant impact on both variables of interest.

Introduction:

Joachim Schwalbach is Professor emeritus of International Management at Humboldt-Universität zu Berlin, Germany. From 2004-2006 he was the Dean of the School of Business and Economics. He was a visiting professor at various universities like Harvard, Santa Barbara, Stanford GSB, and Toulouse; and is visiting regularly Peking University-Guanghua School of Management and Sun Yat-sen - Business School in Guangzhou. His research and consulting fields are: corporate social responsibility, corporate governance, responsible leadership, and executive pay, effective boards of directors, corporate and CEO reputation management, and international market entry. He is editor and associate editor for various academic book series and journals, and published books and many articles in leading academic journals. Joachim Schwalbach organizes the world’s premier international conference on corporate sustainability and responsibility. Every two years, leading experts from around the world have been meeting in Berlin for exploring the global themes of CSR (see: www.csr-hu-berlin.org).

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