Do economic incentives of controlling shareholders influence corporate social responsibility disclosure? A natural experiment

Weixing Cai, Edward Lee, Zhenyu Wu, Alice Liang Xu, Cheng Zeng

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Abstract

We evaluate whether voluntary corporate social responsibility (CSR) disclosure is influenced by the economic incentives of controlling shareholders. To examine this research question, we apply the natural experiment setting based on the Split Share Structure Reform in China. Following this Reform, Chinese state shareholders are allowed to trade their shares in the stock market, which increases their incentives to maximize the market value of the firms that they control. We present empirical evidence of increased CSR disclosure among listed state-owned enterprises after this Reform. This evidence suggests that the economic incentives of key stakeholders play an important role in promoting voluntary CSR disclosures.
Original languageEnglish
Pages (from-to)238-250
JournalThe International Journal of Accounting
Volume52
Issue number3
DOIs
Publication statusPublished - 19 Jul 2017

Keywords

  • Corporate social responsibility disclosure
  • Split Share Structure Reform
  • State-owned enterprises
  • China

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