Corporate social responsibility reporting and firm performance: evidence from China

A series of product safety and child labor scandals in the mid-2000s aroused global concerns over business ethics and corporate social responsibility (CSR) in China. The general public expects companies to be socially responsible and to look beyond the maximizing of profits. In this study, we examine the relationship between the issuance of CSR reports and performance, in terms of accounting income, market return, and growth by firms listed in China in 2008–2009. We find that the historical performance of firms has significant and positive effects on the issuance of standalone CSR reports. There is also a positive correlation between current CSR disclosures and subsequent performance. Finally, we find that corporate donations are positively associated with improved performance in the following year. Our results support the view that CSR is a useful business strategy even in a developing country such as China. We call for government authorities in emerging markets to advocate CSR practices and for the market participants to change their perception of and attitude towards CSR.