IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i6p2457-d1357809.html
   My bibliography  Save this article

The Impact of Corporate Social Responsibility on Environmental Investment: The Mediating Effects of Information Transmission and Resource Acquisition

Author

Listed:
  • Ruizhi Liu

    (Management College, Ocean University of China, Qingdao 266100, China)

  • Fei Song

    (Management College, Ocean University of China, Qingdao 266100, China)

  • Mark Wu

    (Mario J. Gabelli School of Business, Roger Williams University, One Old Ferry Road, Bristol, RI 02809, USA)

  • Yuming Zhang

    (School of Management, Shandong University, Jinan 250100, China)

Abstract

In recent years, more and more research has focused on the impact of corporate social responsibility (CSR) on business activities. Due to the existence of two different theoretical perspectives, shareholder value theory and managerial opportunism theory, the research on CSR has reached different conclusions. Meanwhile, the motivations for environmental investments in enterprises have received attention from scholars. However, there is a lack of empirical research on the relationship between CSR and environmental investment. Therefore, this study conducts a regression analysis on the external evaluation of CSR and enterprises’ environmental investment using data from Chinese listed companies. The empirical results show a significant positive relationship between the external evaluation of CSR and enterprises’ environmental investment. The mediating tests conducted based on information transmission and resource acquisition mechanisms explain the reasons for this promotion effect, supporting the shareholder value theory. Furthermore, our research finds that this promotion effect is more significant in non-state-owned enterprises, enterprises receiving fewer environmental subsidies, enterprises disclosing environmental philosophies, and enterprises identified as key pollution-monitoring units in reports. The research findings of this study are meaningful for clarifying the economic consequences of CSR and provide practical evidence for Chinese enterprises to understand the importance of environmental investment and the government’s advocacy for enterprises to proactively engage in environmental investment.

Suggested Citation

  • Ruizhi Liu & Fei Song & Mark Wu & Yuming Zhang, 2024. "The Impact of Corporate Social Responsibility on Environmental Investment: The Mediating Effects of Information Transmission and Resource Acquisition," Sustainability, MDPI, vol. 16(6), pages 1-27, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:6:p:2457-:d:1357809
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/6/2457/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/6/2457/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xue, Shuyu & Chang, Qi & Xu, Jingwen, 2023. "The effect of voluntary and mandatory corporate social responsibility disclosure on firm profitability: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    2. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    3. Hsiangtsai Chiang & Li-Jen He & Cang-Fu Shiao, 2015. "Financial Reports Quality and Corporate Social Responsibility," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 453-467.
    4. Wayne B Gray & Ronald J Shadbegian, 1993. "Environmental Regulation And Manufacturing Productivity At The Plant Level," Working Papers 93-6, Center for Economic Studies, U.S. Census Bureau.
    5. Pascal Nguyen & Anna Nguyen, 2015. "The effect of corporate social responsibility on firm risk," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 11(2), pages 324-339, June.
    6. Meng-Feng Yen & Jia-Hui Lin & Yu-Ting Sun, 2015. "Does Corporate Social Responsibility Deliver Alpha?," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 11(1), pages 23-45, January.
    7. Goss, Allen & Roberts, Gordon S., 2011. "The impact of corporate social responsibility on the cost of bank loans," Journal of Banking & Finance, Elsevier, vol. 35(7), pages 1794-1810, July.
    8. Min Maung & Craig Wilson & Xiaobo Tang, 2016. "Political Connections and Industrial Pollution: Evidence Based on State Ownership and Environmental Levies in China," Journal of Business Ethics, Springer, vol. 138(4), pages 649-659, November.
    9. Ruxi Wang & Frank Wijen & Pursey P.M.A.R. Heugens, 2018. "Government's green grip: Multifaceted state influence on corporate environmental actions in China," Strategic Management Journal, Wiley Blackwell, vol. 39(2), pages 403-428, February.
    10. Toni M. Whited & Guojun Wu, 2006. "Financial Constraints Risk," The Review of Financial Studies, Society for Financial Studies, vol. 19(2), pages 531-559.
    11. Cai, Weixing & Lee, Edward & Xu, Alice Liang & Zeng, Cheng (Colin), 2019. "Does corporate social responsibility disclosure reduce the information disadvantage of foreign investors?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 34(C), pages 12-29.
    12. Pedersen, Lasse Heje & Fitzgibbons, Shaun & Pomorski, Lukasz, 2021. "Responsible investing: The ESG-efficient frontier," Journal of Financial Economics, Elsevier, vol. 142(2), pages 572-597.
    13. Carlos Noronha & Tiffany Cheng Han Leung & On Ieng Lei, 2015. "Corporate social responsibility disclosure in Chinese railway companies," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 6(4), pages 446-474, November.
    14. Edward Nelling & Elizabeth Webb, 2009. "Corporate social responsibility and financial performance: the “virtuous circle” revisited," Review of Quantitative Finance and Accounting, Springer, vol. 32(2), pages 197-209, February.
    15. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    16. Amir Barnea & Amir Rubin, 2010. "Corporate Social Responsibility as a Conflict Between Shareholders," Journal of Business Ethics, Springer, vol. 97(1), pages 71-86, November.
    17. Yi Tang & Cuili Qian & Guoli Chen & Rui Shen, 2015. "How CEO hubris affects corporate social (ir)responsibility," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1338-1357, September.
    18. Qian, Xuesong & Ding, Hai & Ding, Zifang, 2023. "Governmental inspection and firm environmental protection expenditure: Evidence from China," Economic Modelling, Elsevier, vol. 123(C).
    19. Massimo Massa & Bohui Zhang & Hong Zhang, 2015. "The Invisible Hand of Short Selling: Does Short Selling Discipline Earnings Management?," The Review of Financial Studies, Society for Financial Studies, vol. 28(6), pages 1701-1736.
    20. Li-Jen He & Hsiangtsai Chiang & Cang-Fu Shiao, 2015. "Financial Reports Quality and Corporate Social Responsibility," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 453-467, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jongwon Park & Sunyoung Kim & Albert Tsang, 2023. "CEO Personal Hedging and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 182(1), pages 199-221, January.
    2. Li, Chengcheng & Wang, Xiaoqiong, 2022. "Local peer effects of corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 73(C).
    3. Anagnostopoulou, Seraina C. & Tsekrekos, Andrianos E. & Voulgaris, Georgios, 2021. "Accounting conservatism and corporate social responsibility," The British Accounting Review, Elsevier, vol. 53(4).
    4. Qinglan Wu & Guifu Chen & Jing Han & Liyan Wu, 2022. "Does Corporate ESG Performance Improve Export Intensity? Evidence from Chinese Listed Firms," Sustainability, MDPI, vol. 14(20), pages 1-16, October.
    5. Ben Lahouel, Béchir & Ben Zaied, Younes & Managi, Shunsuke & Taleb, Lotfi, 2022. "Re-thinking about U: The relevance of regime-switching model in the relationship between environmental corporate social responsibility and financial performance," Journal of Business Research, Elsevier, vol. 140(C), pages 498-519.
    6. Ntim, Collins G., 2016. "Corporate governance, corporate health accounting, and firm value: The case of HIV/AIDS disclosures in Sub-Saharan Africa," The International Journal of Accounting, Elsevier, vol. 51(2), pages 155-216.
    7. McCarthy, Scott & Oliver, Barry & Song, Sizhe, 2017. "Corporate social responsibility and CEO confidence," Journal of Banking & Finance, Elsevier, vol. 75(C), pages 280-291.
    8. Chowdhury, Hasibul & Hodgson, Allan & Hasan, Mostafa Monzur, 2022. "Does a competitive external labour market affect corporate social responsibility? Evidence from industry tournament incentives," Journal of Behavioral and Experimental Finance, Elsevier, vol. 33(C).
    9. Sung C. Bae & Kiyoung Chang & Ha-Chin Yi, 2018. "Corporate social responsibility, credit rating, and private debt contracting: new evidence from syndicated loan market," Review of Quantitative Finance and Accounting, Springer, vol. 50(1), pages 261-299, January.
    10. She‐Chih Chiu & Hsuan‐Chu Lin & Chuan‐San Wang, 2017. "The Impact of Investments in Pollution Reduction on Shareholder Wealth: Evidence from Taiwanese Manufacturing Companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(6), pages 676-691, November.
    11. Monica Singhania & Dimple Gupta, 2024. "Impact of Environmental, Social and Governance (ESG) disclosure on firm risk: A meta‐analytical review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3573-3613, July.
    12. Kwang Hwa Jeong & Seok Woo Jeong & Woo Jae Lee & Seong Ho Bae, 2018. "Permanency of CSR Activities and Firm Value," Journal of Business Ethics, Springer, vol. 152(1), pages 207-223, September.
    13. Kalpana Tokas & Kartik Yadav, 2023. "Foreign Ownership and Corporate Social Responsibility: The Case of an Emerging Market," Global Business Review, International Management Institute, vol. 24(6), pages 1302-1325, December.
    14. Ferrell, Allen & Liang, Hao & Renneboog, Luc, 2016. "Socially responsible firms," Journal of Financial Economics, Elsevier, vol. 122(3), pages 585-606.
    15. Francesco Gangi & Antonio Meles & Eugenio D'Angelo & Lucia Michela Daniele, 2019. "Sustainable development and corporate governance in the financial system: Are environmentally friendly banks less risky?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 529-547, May.
    16. Al-Shaer, Habiba & Uyar, Ali & Kuzey, Cemil & Karaman, Abdullah S., 2023. "Do shareholders punish or reward excessive CSR engagement? Moderating effect of cash flow and firm growth," International Review of Financial Analysis, Elsevier, vol. 88(C).
    17. Champagne, Claudia & Coggins, Frank & Sodjahin, Amos, 2022. "Can extra-financial ratings serve as an indicator of ESG risk?," Global Finance Journal, Elsevier, vol. 54(C).
    18. Tan, Yafei & Zhu, Zhaohui, 2022. "The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness," Technology in Society, Elsevier, vol. 68(C).
    19. Bai Xue & Zhuang Zhang & Pingli Li, 2020. "Corporate environmental performance, environmental management and firm risk," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 1074-1096, March.
    20. Patricia Crifo & Elena Escrig-Olmedo & Nicolas Mottis, 2019. "Corporate Governance as a Key Driver of Corporate Sustainability in France: The Role of Board Members and Investor Relations," Journal of Business Ethics, Springer, vol. 159(4), pages 1127-1146, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:6:p:2457-:d:1357809. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.