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Crises and changes: The impacts of CSR expenditure on loan and subsidy allocation in China's Pre- and Post-Pandemic periods

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  • Zhang, Yuming
  • Xing, Chao
  • Zhang, Quanli
  • Zhang, Xinyue

Abstract

China's governments reward corporate social responsibility (CSR) by granting subsidies or loans. Using China's listed firm data, we prove that firms with higher CSR expenditure levels are granted more loans than subsidies before the COVID-19 outbreak. However, in the post-pandemic period, the impact on loans is mitigated but that on subsidies is enhanced. This reverse phenomenon is more significant for politically connected firms, state-owned enterprises and regions with a low marketisation level. We show that subsidies are beneficial for firm value in the post-pandemic period. These findings indicate that China's governments cooperate with prosocial firms to revive the economy.

Suggested Citation

  • Zhang, Yuming & Xing, Chao & Zhang, Quanli & Zhang, Xinyue, 2022. "Crises and changes: The impacts of CSR expenditure on loan and subsidy allocation in China's Pre- and Post-Pandemic periods," Finance Research Letters, Elsevier, vol. 47(PB).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322000265
    DOI: 10.1016/j.frl.2022.102697
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    More about this item

    Keywords

    Corporate social responsibility; Loan; Subsidy; COVID-19; China;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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