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Does venture capital improve corporate social responsibility performance?

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  • Luo, Ronghua
  • Zhao, Baofang
  • Han, Chunjia
  • Wang, Sen

Abstract

In recent years, market agents have paid more attention to firm-level sustainable developments, but the economic effects of venture capital on corporate social responsibility (CSR) performance are not clear. We empirically investigated this issue using data from Chinese nonfinancial A-share listed firms between 2010 and 2019. We found that venture capital participation may reduce the CSR performance of portfolio companies (e.g., SMEs), and the quality of internal control (ICQ) is an effective mechanism for venture capital to affect CSR performance. We offer new insights into the relationship between venture capital and CSR in emerging markets.

Suggested Citation

  • Luo, Ronghua & Zhao, Baofang & Han, Chunjia & Wang, Sen, 2023. "Does venture capital improve corporate social responsibility performance?," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 1138-1150.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:1138-1150
    DOI: 10.1016/j.iref.2023.07.070
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    References listed on IDEAS

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    1. Rong, Zhao & Wu, Xiaokai & Boeing, Philipp, 2017. "The effect of institutional ownership on firm innovation: Evidence from Chinese listed firms," Research Policy, Elsevier, vol. 46(9), pages 1533-1551.
    2. Erhemjamts, Otgontsetseg & Huang, Kershen, 2019. "Institutional ownership horizon, corporate social responsibility and shareholder value," Journal of Business Research, Elsevier, vol. 105(C), pages 61-79.
    3. Philipp Krueger & Zacharias Sautner & Laura T Starks, 2020. "The Importance of Climate Risks for Institutional Investors," The Review of Financial Studies, Society for Financial Studies, vol. 33(3), pages 1067-1111.
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    Cited by:

    1. Lin, Boqiang & Xie, Yongjing, 2024. "Driving renewable energy innovation investments: Is venture capital a novel strategic choice? Evidence from China," Renewable Energy, Elsevier, vol. 237(PC).

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