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

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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.

Bibliographical metadata

Original languageEnglish
JournalThe International Journal of Accounting
Early online date19 Jul 2017
DOIs
Publication statusPublished - 2017