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Article

Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms

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School of Electronic Commerce, Wuhan Technology and Business University, Wuhan 430065, China
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Department of Management Sciences, COMSATS University Islamabad (CUI), Islamabad 44000, Pakistan
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Accounting Department, FUCAPE Business School, Av. Fernando Ferrari, 1358, Boa Vista, Vitória–ES 29075-505, Brazil
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The College of Hospitality and Tourism Management, Sejong University, 98 Gunja-Dong, Gwanjin-Gu, Seoul 143-747, Korea
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Faculty of Accounting and Auditing, University of Economics and Law, VNU-HCM, Ho Chi Minh City 700000, Vietnam
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Faculty of Finance and Accounting, Nguyen Tat Thanh University, Ho Chi Minh City 700000, Vietnam
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Authors to whom correspondence should be addressed.
Sustainability 2020, 12(1), 149; https://doi.org/10.3390/su12010149
Received: 24 October 2019 / Revised: 10 December 2019 / Accepted: 16 December 2019 / Published: 23 December 2019
(This article belongs to the Special Issue Financial Risk Management and Sustainability)
We have performed a focalized investigation to explore how corporate social responsibility (CSR) moderates the relationship between corporate governance and firms’ financial performance. We applied a panel regression to examine this relationship from a sample of 3400 Shanghai Stock Exchange (SSE) listed firms, based on yearly observations from 2009 to 2018. Our results show that the presence of female directors on the board is associated with improved firms’ performance and that corporate social responsibility (CSR) moderates this relation, thus indicating that sharing strategic decision-making with female board members revealed a better relationship between CSR and firms’ financial performance. Our findings showed that foreign institutional investors positively influenced firms’ financial performance and that CSR moderates the relation between foreign institutional shareholders and the firm’s financial performance. Supported by corporate governance theories, such as resource dependence and stakeholder theory, our results help to better understand the nexus among corporate governance, firms’ performance and corporate social responsibility. These findings are advantageous to government departments in emerging countries in terms of encouraging marketing practitioners and participants to implement CSR practices and change the attitude associated with CSR implications. This study highlighted the problems of the foreign institutional investors’ scheme, which was the main contribution to the financial market reform of China after 2003. These findings offer significant implications to corporate affairs executives and managers, practitioners, academicians, state officials, and policy-makers, and might provide China with the opportunity to extend its market liberalization to the global markets. This research also contributes to the existing literature, which investigates how CSR moderates the relationship between corporate governance and firms’ financial performance in the Chinese market context. View Full-Text
Keywords: corporate social responsibility (CSR); corporate governance; female directors; foreign institutional investors; Chinese firms’ financial performance corporate social responsibility (CSR); corporate governance; female directors; foreign institutional investors; Chinese firms’ financial performance
MDPI and ACS Style

Ali, R.; Sial, M.S.; Brugni, T.V.; Hwang, J.; Khuong, N.V.; Khanh, T.H.T. Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms. Sustainability 2020, 12, 149. https://doi.org/10.3390/su12010149

AMA Style

Ali R, Sial MS, Brugni TV, Hwang J, Khuong NV, Khanh THT. Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms. Sustainability. 2020; 12(1):149. https://doi.org/10.3390/su12010149

Chicago/Turabian Style

Ali, Rizwan, Muhammad S. Sial, Talles V. Brugni, Jinsoo Hwang, Nguyen V. Khuong, and Thai H.T. Khanh 2020. "Does CSR Moderate the Relationship between Corporate Governance and Chinese Firm’s Financial Performance? Evidence from the Shanghai Stock Exchange (SSE) Firms" Sustainability 12, no. 1: 149. https://doi.org/10.3390/su12010149

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