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Mandatory CSR disclosure, institutional ownership and firm value: Evidence from China
Shah, S.Z.A. Zhu, X.
Shah, S.Z.A.
Zhu, X.
Publication Date
2025-01
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© 2023 The Authors. International Journal of Finance & Economics published by John Wiley & Sons Ltd.
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
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21/10/2023
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Abstract
This study aims to contribute to the relevant accounting, corporate gover-nance, and corporate social responsibility (CSR) literature by examining thevalue relevance of mandatory CSR disclosures in China. Using a difference-in-differences (DID) research design and a sample based on propensity scorematching (PSM) over the period from 2003 to 2020, our findings suggest thatmandatory CSR disclosures are negatively associated with firm' values. We alsofind that firms with a high level of institutional ownership and leverage experi-ence a relatively lower drop in firms' values as a result of the mandatory CSRdisclosures. These findings remain robust to alternative sampling design, use of market to book value as an alternative measure of firms' market-based performance, and a parallel test to validate our DID analysis. Our findings have useful implications for managers, regulators, policy makers and other stakeholders.
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Ali SZA, Akbar S and Zhu X (2025) Mandatory CSR disclosure, institutional ownership and firm value: Evidence from China. International Journal of Finance and Economics. 30(1): 71-85.
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