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The Real Effects of Mandatory Corporate Social Responsibility Reporting in China

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  • Tong Lu
  • Konduru Sivaramakrishnan
  • Yanyan Wang
  • Lisheng Yu

Abstract

We investigate the real effects of corporate social responsibility (CSR) reporting regulation enacted in China in 2008 covering both state‐owned enterprises (SOEs) and non‐state‐owned enterprises (NSOEs). As the CSR reporting requirement applies only to select firms, the regulation presents a unique setting that provides us with a suitable control sample of firms not subject to the regulation. Using a difference‐in‐differences approach, we document that relative to firms that are not affected by the regulation, NSOEs and SOEs with low state ownership subject to the mandate are associated with increases in CSR expenditures. Moreover, the real effects manifest in non‐core initiatives for these firms, whereas they manifest in core operating activities for SOEs with high state ownership. Finally, the effects of the mandatory CSR reporting on profitability and shareholder value are negative.

Suggested Citation

  • Tong Lu & Konduru Sivaramakrishnan & Yanyan Wang & Lisheng Yu, 2021. "The Real Effects of Mandatory Corporate Social Responsibility Reporting in China," Production and Operations Management, Production and Operations Management Society, vol. 30(5), pages 1493-1516, May.
    • Handle: RePEc:bla:popmgt:v:30:y:2021:i:5:p:1493-1516
    DOI: 10.1111/poms.13334
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    Cited by:

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    2. Zhi Cao & Yinping Mu, 2022. "Social and Environmental Regulations and Corporate Innovation," Sustainability, MDPI, vol. 14(23), pages 1-17, December.
    3. Guo Li & Na Li & Suresh P. Sethi, 2021. "Does CSR Reduce Idiosyncratic Risk? Roles of Operational Efficiency and AI Innovation," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2027-2045, July.
    4. Fan, Xiaoqing & Zhang, Jianxiong & Yao, Yao & Wei, Liqun, 2024. "Social responsibility disclosure format in a supply chain," Omega, Elsevier, vol. 126(C).
    5. Zhu, Minghao & Liang, Chen & Yeung, Andy C.L. & Zhou, Honggeng, 2024. "The impact of intelligent manufacturing on labor productivity: An empirical analysis of Chinese listed manufacturing companies," International Journal of Production Economics, Elsevier, vol. 267(C).
    6. He, Feng & Liu, Guanchun & Hao, Jing & Li, Youwei, 2023. "CSR performance and firm idiosyncratic risk in a data-rich environment: The role of retail investor attention," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 89(C).

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