Corporate Social Responsibility Strategy, Behavior and Financial Performance: Evidence from Inconsistent Phenomena in China

Wenwen Lyu; Yan Cheng; Zarina Abdul Salam; Qiao Wang

doi:10.5755/j01.ee.37.3.40649

Authors

Wenwen Lyu School of Economics and Management, Chuzhou University, China; Azman Hashim International Business School of Universiti Teknologi Malaysia, Malaysia https://orcid.org/0000-0001-8509-236X
Yan Cheng School of Economics and Management, Chuzhou University, China
Zarina Abdul Salam Azman Hashim International Business School of Universiti Teknologi Malaysia, Malaysia
Qiao Wang School of Economics and Management, Chuzhou University, China

DOI:

https://doi.org/10.5755/j01.ee.37.3.40649

Keywords:

CSR Strategy (CSRS), CSR Behavior (CSRB), Corporate Reputation (CR), Stepwise-GMM Method, Bootstrapping

Abstract

In recent years, with the increasing awareness of sustainable development, corporate social reposibility (CSR) has garnered widespread attention from investors and has had a sustained impact on long-term business operations. In developed countries, CSR enriches societal well-being and promotes a positive brand image for companies, eventually enhancing their corporate financial performance (governance effect). However, some Chinese enterprises reluctance to undertake CSR or only greenwashing behavior (window-dressing effect). This study attempts to investigate the inconsistent influence of conventional CSR on corporate financial performance within the Chinese context on the basis of strategic management, stakeholder, and reputation capital theories. The sample used in this study was China's listed companies from 2011-2019 via the stepwise generalized method of moments (GMM) and bootstrap tests. The results revealed that CSR strategy and behavior are insignificant with accounting performance (no governance effect) and significant with market performance (window-dressing effect) within the Chinese context. This study also revealed that corporate reputation does not mediate the relationship among CSR strategy, behavior and accounting performance and partially mediates the relationship with market performance in China. These findings fill gaps in the previous literature, and also partially explain the reasons for the greenwashing behavior of Chinese companies, which has management implications.

Author Biographies

Wenwen Lyu, School of Economics and Management, Chuzhou University, China; Azman Hashim International Business School of Universiti Teknologi Malaysia, Malaysia

Lyu Wenwen, Dr., Postdoc in Universiti Teknologi Malaysia; received her Master degree of Management from Hefei University of Technology in 2009. She is an associate professor in the School of Economics and Management of Chuzhou University currently and graduated from the Azman Hashim International Business School of Universiti Teknologi Malaysia as a PhD. Her research fields include corporate social responsibility, sustainability, accounting, financial management, financial performance, risk management etc.
Yan Cheng, School of Economics and Management, Chuzhou University, China

Yan Cheng is a senior lecture in the School of Economics and Management of Chuzhou University currently. Her research fields include sustainability, accounting, auditing, financial management, financial performance etc.
Zarina Abdul Salam, Azman Hashim International Business School of Universiti Teknologi Malaysia, Malaysia

Zarina Abdul Salam*, Dr., is an associate professor in the Azman Hashim International Business School of Universiti Teknologi Malaysia currently. Her research fields include accounting, financial management, financial performance, risk management etc.
Qiao Wang, School of Economics and Management, Chuzhou University, China

Qiao Wang received his Master degree of Management from Anhui University in 2009. He is a professor in the School of Economics and Management of Chuzhou University currently. His research fields include economic, market investigate and evaluation etc.