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Sustainability 2017, 9(9), 1532; doi:10.3390/su9091532

Impact of Corporate Social Responsibility Dimensions on Firm Value: Some Evidence from Hong Kong and China

1
Department of Management and Marketing, University of Melbourne, Melbourne, VIC 3010, Australia
2
Melbourne Business School, University of Melbourne, Melbourne, VIC 3053, Australia
3
Wee Kim Wee School of Communication and Information, Nanyang Technological University, Singapore 637718, Singapore
*
Author to whom correspondence should be addressed.
Received: 13 July 2017 / Revised: 21 August 2017 / Accepted: 24 August 2017 / Published: 28 August 2017
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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Abstract

There has been significant interest and debate on the impact that a firm’s investments in corporate social responsibility (CSR) practices and initiatives have on its market value. In this paper, we target an area that is relatively under-researched: the relevance of CSR practices and initiatives for firms in the emerging economic region of mainland China and Hong Kong, where market development and the institutional environment lag that of developed economies. Using independent CSR assessment data on a sample of large mainland Chinese and Hong Kong firms listed on the Hong Kong Stock Exchange, we evaluate the impact of six CSR dimensions on the firms’ adjusted stock market value over a three-year period. We found support for the influence of only two of the six dimensions considered, namely, the CSR practices and initiatives focused on community investment through philanthropy and, to a lesser extent, the CSR practices and initiatives focused on enhancing workplace quality, to be significant predictors of firm value. This suggests that social and people-centric dimensions of CSR are more relevant than technical and process-centric dimensions of CSR for mainland Chinese and Hong Kong firms. Furthermore, we found support for the hypothesis that the impact of CSR practices and initiatives on firm value follows an inverted U-shaped relationship over time, suggesting that the effect of these initiatives on firm value steadily increases during the initial years after their adoption to reach a maximum and then gradually fades away in subsequent years. To this end, this study advances our knowledge of the specific CSR dimensions that contribute to firm value and their relevance for Chinese and Hong Kong firms. View Full-Text
Keywords: corporate social responsibility; financial performance; stock market value; linear mixed modeling method; China; Hong Kong corporate social responsibility; financial performance; stock market value; linear mixed modeling method; China; Hong Kong
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Singh, P.J.; Sethuraman, K.; Lam, J.Y. Impact of Corporate Social Responsibility Dimensions on Firm Value: Some Evidence from Hong Kong and China. Sustainability 2017, 9, 1532.

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