Corporate social responsibility disclosure and catering to investor sentiment in China
ISSN: 0025-1747
Article publication date: 2 May 2018
Issue publication date: 10 September 2018
Abstract
Purpose
The purpose of the paper is to examine the impact of investor sentiment on managers’ decisions to provide CSR disclosures. The core issue focuses on whether, why and how managers adjust their approach to CSR disclosure to cater to the investor sentiment.
Design/methodology/approach
On the basis of 13,488 observations of A-share listed companies, the authors examine the impacts of investor sentiment on CSR disclosure, which is measured separately by the propensity to issue a standalone CSR report and the quality of CSR reports. Furthermore, the authors examine the moderating role of institutional factors in China.
Findings
The authors find that during low-sentiment periods, managers are more likely to issue a standalone CSR report and the quality of CSR reports is higher, and vice versa. Additionally, the authors find that the negative correlations between CSR disclosure and investor sentiment are stronger in state-owned enterprises.
Research limitations/implications
First, the measurement of investor sentiment reflects only a part of characteristics of investor sentiment. Second, the authors pay less attention to the specific items of a CSR report.
Originality/value
The study contributes to the literature on CSR disclosure and investor sentiment by combining the two fields together. Furthermore, the study deepens the understanding of the institutional context in China and contributes to research on the predictors of CSR disclosure.
Keywords
Acknowledgements
Ethical approval: this paper does not contain any studies with human participants or animals performed by any of the authors. This study was funded by Natural Science Foundation of Shandong Province (Grant No. ZR2014GP004), Shandong Province Social Science Planning Project (Grant No. 15CGLJ22) as well as the Global Research Network program through the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (Grant No. NRF-2016S1A2A2912421). Conflict of interest: the authors declare no conflict of interest.
Citation
Sun, W., Zhao, C., Wang, Y. and Cho, C.H. (2018), "Corporate social responsibility disclosure and catering to investor sentiment in China", Management Decision, Vol. 56 No. 9, pp. 1917-1935. https://doi.org/10.1108/MD-08-2017-0806
Publisher
:Emerald Publishing Limited
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