Does share pledging promote or impede corporate social responsibility? An examination of Chinese listed firms

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

10 Scopus Citations
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Detail(s)

Original languageEnglish
Pages (from-to)175–195
Number of pages21
Journal / PublicationEconomic Research-Ekonomska Istrazivanja
Volume35
Issue number1
Online published4 Mar 2021
Publication statusPublished - 2022

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Abstract

By employing the Chinese listed firm's data from 2010 to 2017, this study explores the impact of share pledging on firms' corporate social responsibility (CSR) performance. Empirical results indicate a negative relationship between share pledging and CSR performance. This effect is robust after using alternative measures and different regression methods, and also consistent after tackling the endogenous issues. Furthermore, we find that risk-taking and agency cost are two possible underlying mechanisms through which share pledging reduces CSR. In addition, CSR reduction caused by share pledging leads to poorer economic performance and lower market value of firms.

Research Area(s)

  • Share pledging, Agency cost, Corporate social responsibility

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