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The relationship between CSR disclosure and competitive advantage

Author

Listed:
  • Hui-Cheng Yu
  • Lopin Kuo
  • Mao-Feng Kao

Abstract

Purpose - This study aims to apply signaling theory to examine whether corporate social responsibility (CSR) disclosure can deliver effective signals to stakeholders to increase a firm’s competitive advantage in China. Whether ownership patterns or environmental sensitivity causes a significant difference in the relationship between a firm’s CSR disclosure and competitive advantage is also examined. Design/methodology/approach - Data analysis is based on a regression model. Content analysis is performed to convert qualitative CSR information of Chinese firms into quantitative data, while intellectual capital (IC) is used as a proxy variable for competitive advantage. Findings - The difference in competitive advantage impairment between environmentally sensitive industries (ESIs) and non-environmentally sensitive industries (NESIs) is significant. Further comparisons on the relationship between overall CSR disclosure and competitive advantage among state-owned enterprises, privately owned enterprises, ESIs and NESIs suggest that the relationship is negative. Research limitations/implications - The study extends research of strategic CSR to signaling theory and competitive advantage. In particular, a research using IC as a proxy for competitive advantage is rare. It also contributes to the literature on competitive advantage and strategic CSR by examining the effects of both CSR disclosure and IC. Originality/value - This paper provides evidence related to stakeholders’ reaction to managers’ various CSR strategies in China. The contribution of this study is that it confirms that different CSR initiatives have different effects on the competitiveness of enterprises in China.

Suggested Citation

  • Hui-Cheng Yu & Lopin Kuo & Mao-Feng Kao, 2017. "The relationship between CSR disclosure and competitive advantage," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 8(5), pages 547-570, November.
    • Handle: RePEc:eme:sampjp:sampj-11-2016-0086
    DOI: 10.1108/SAMPJ-11-2016-0086
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    Citations

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    Cited by:

    1. Qian, Wei & Parker, Lee & Zhu, Jingyu, 2024. "Corporate environmental reporting in the China context: The interplay of stakeholder salience, socialist ideology and state power," The British Accounting Review, Elsevier, vol. 56(1).
    2. Fadi Shehab Shiyyab & Abdallah Bader Alzoubi & Qais Mohammad Obidat & Hashem Alshurafat, 2023. "The Impact of Artificial Intelligence Disclosure on Financial Performance," IJFS, MDPI, vol. 11(3), pages 1-25, September.
    3. Zhao, Tianjiao & Chan, Kam C., 2023. "Corporate social network and corporate social responsibility: A perspective of interlocking directorates," International Review of Financial Analysis, Elsevier, vol. 88(C).
    4. Francisco Javier Forcadell & Antonio Lorena & Elisa Aracil, 2023. "The firm under the spotlight: How stakeholder scrutiny shapes corporate social responsibility and its influence on performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(3), pages 1258-1272, May.
    5. Md Ali Arshad Chowdhury & Mohammad Morshedur Rahman & Mouri Dey & Syed Moudud-Ul-Huq & Sk Alamgir Hossain, 2023. "Perceived Pressures and Motivations for Environmental Disclosures: Role of Certification," SAGE Open, , vol. 13(4), pages 21582440231, December.
    6. Yasemin Lheureux, 2024. "Predictive insights: leveraging Twitter sentiments and machine learning for environmental, social and governance controversy prediction," Journal of Computational Social Science, Springer, vol. 7(1), pages 23-44, April.

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