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Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China

Zhe Li Orcid Logo, Ping Wang, Tianlong Wu

Journal of Business Finance & Accounting, Volume: 48, Issue: 1-2, Pages: 338 - 373

Swansea University Author: Zhe Li Orcid Logo

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DOI (Published version): 10.1111/jbfa.12481

Abstract

This paper investigates the effect of qualified foreign institutional investors (QFIIs) on corporate social responsibility (CSR) within the context of listed firms in China. We find that QFIIs offer an incisive channel for improving socially responsible practices. In addition, we find that firms wit...

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Published in: Journal of Business Finance & Accounting
ISSN: 0306-686X 1468-5957
Published: Wiley 2021
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URI: https://cronfa.swan.ac.uk/Record/cronfa56150
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corporate social responsibility 1
environmental, social, and governance (esg) 1
esg 1
qualified foreign institutional investors 1
first_indexed 2021-01-31T08:43:57Z
last_indexed 2021-12-14T04:23:55Z
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spelling 2021-12-13T12:16:14.0523458 v2 56150 2021-01-31 Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China c597db9f314a168667e3e40d5778db9c 0000-0003-1442-4499 Zhe Li Zhe Li true false 2021-01-31 BAF This paper investigates the effect of qualified foreign institutional investors (QFIIs) on corporate social responsibility (CSR) within the context of listed firms in China. We find that QFIIs offer an incisive channel for improving socially responsible practices. In addition, we find that firms with QFIIs are more likely to comply with the Global Reporting Initiative (GRI) guidelines, and that their sustainability reports tend to be longer. We also find that this positive effect is more pronounced in firms with low initial CSR scores than those with high CSR scores at the time when QFIIs enter the sample. Our empirical evidence further confirms that this positive impact is driven by QFIIs from countries with high social awareness, or QFIIs from geographically distant countries, consistent with their motives, and is linked to the ownership of QFIIs, especially when the QFII is among the top ten of the largest shareholders. Finally, our extended analysis reveals that the increase in CSR performance associated with the presence of QFIIs results in greater firm performance and easier access to finance. Journal Article Journal of Business Finance & Accounting 48 1-2 338 373 Wiley 0306-686X 1468-5957 Qualified foreign institutional investors; corporate social responsibility; social awareness; information asymmetry; capital market benefits 9 2 2021 2021-02-09 10.1111/jbfa.12481 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University Another institution paid the OA fee 2021-12-13T12:16:14.0523458 2021-01-31T08:40:03.0729308 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Zhe Li 0000-0003-1442-4499 1 Ping Wang 2 Tianlong Wu 3 56150__21876__ab9a1b40453640bcae9e327ec40e9884.pdf 56150.VOR.pdf 2021-12-13T12:05:28.6555371 Output 334200 application/pdf Version of Record true Distributed under the terms of a Creative Commons Attribution (CC-BY) Licence. ©2020TheAuthors. true eng http://creativecommons.org/licenses/by/4.0/
title Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
spellingShingle Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
Zhe Li
title_short Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
title_full Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
title_fullStr Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
title_full_unstemmed Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
title_sort Do foreign institutional investors drive corporate social responsibility? Evidence from listed firms in China
author_id_str_mv c597db9f314a168667e3e40d5778db9c
author_id_fullname_str_mv c597db9f314a168667e3e40d5778db9c_***_Zhe Li
author Zhe Li
author2 Zhe Li
Ping Wang
Tianlong Wu
format Journal article
container_title Journal of Business Finance & Accounting
container_volume 48
container_issue 1-2
container_start_page 338
publishDate 2021
institution Swansea University
issn 0306-686X
1468-5957
doi_str_mv 10.1111/jbfa.12481
publisher Wiley
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
active_str 0
description This paper investigates the effect of qualified foreign institutional investors (QFIIs) on corporate social responsibility (CSR) within the context of listed firms in China. We find that QFIIs offer an incisive channel for improving socially responsible practices. In addition, we find that firms with QFIIs are more likely to comply with the Global Reporting Initiative (GRI) guidelines, and that their sustainability reports tend to be longer. We also find that this positive effect is more pronounced in firms with low initial CSR scores than those with high CSR scores at the time when QFIIs enter the sample. Our empirical evidence further confirms that this positive impact is driven by QFIIs from countries with high social awareness, or QFIIs from geographically distant countries, consistent with their motives, and is linked to the ownership of QFIIs, especially when the QFII is among the top ten of the largest shareholders. Finally, our extended analysis reveals that the increase in CSR performance associated with the presence of QFIIs results in greater firm performance and easier access to finance.
published_date 2021-02-09T04:10:53Z
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score 11.035655

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