Corporate social responsibility disclosure and catering to investor sentiment in China. Issue 9 (2nd May 2018)

• Record Type: Journal Article
• Authors: Sun, Weizhang; Zhao, Chunguang; Wang, Yaping; Cho, Charles H.
• Is Part Of: Management decision. Volume 56:Issue 9(2018)
• Page Start: 1917
• Page End: 1935
• Publication Date: 2018-05-02
• Subjects: China -- CSR disclosure -- Investor sentiment -- SOEs -- CSR report; Management -- Periodicals; 658.403
• DOI: 10.1108/MD-08-2017-0806
• Languages: English
• ISSNs: 0025-1747

Abstract

Abstract : Purpose: The purpose of the paper is to examine the impact of investor sentiment on managers' decisions to provide CSR disclosures. The core issue focuses on whether, why and how managers adjust their approach to CSR disclosure to cater to the investor sentiment. Design/methodology/approach: On the basis of 13, 488 observations of A-share listed companies, the authors examine the impacts of investor sentiment on CSR disclosure, which is measured separately by the propensity to issue a standalone CSR report and the quality of CSR reports. Furthermore, the authors examine the moderating role of institutional factors in China. Findings: The authors find that during low-sentiment periods, managers are more likely to issue a standalone CSR report and the quality of CSR reports is higher, and vice versa. Additionally, the authors find that the negative correlations between CSR disclosure and investor sentiment are stronger in state-owned enterprises. Research limitations/implications: First, the measurement of investor sentiment reflects only a part of characteristics of investor sentiment. Second, the authors pay less attention to the specific items of a CSR report. Originality/value: The study contributes to the literature on CSR disclosure and investor sentiment by combining the two fields together. Furthermore, the study deepens the understanding of the institutional context in China and contributes to research on the predictors of CSR disclosure.