Local green finance policies and corporate ESG performance

Based on China's government-business relations theory, we use difference-in-differences and causal forest to find that local green finance policies can significantly enhance corporate ESG performance especially for nonstate-owned companies, companies with high levels of executive social capital, non-heavily polluting companies, and companies in developed regions. We also find that the corporate financing constraint mitigation effect and the regional environmental regulation effect of local green finance policies are important mechanisms for promoting corporate ESG performance. Additionally, local green finance policies can strengthen the positive role of corporate ESG performance in enhancing corporate value, which is conducive to corporate sustainability.     

Corporate social responsibility and employee volunteerism: What do the best companies do?

Employee volunteerism as a practice of corporate social responsibility aids corporations by strengthening employee satisfaction and retention internally and by strengthening corporate reputations and connections with stakeholders externally. Of particular interest are the specific practices and procedures used by companies to encourage and support volunteer activities of their employees. We reviewed publicly available documents of Fortune's 100 Best Companies to Work For ranking to gain insight into how these best companies practice employee volunteerism and whether they link employee volunteerism to their corporate social responsibility strategy. We propose a connection of the position and importance of employee volunteerism in the corporate practices of social responsibility. Our findings suggest that many highly regarded companies specifically link employee volunteerism to their corporate social responsibility strategy. These companies also utilize similar practices to encourage and support employee volunteerism. We highlight the practices that managers could consider to support their corporate social responsibility efforts and offer several suggestions for future consideration.     

Corporate Charitable Contributions: A Corporate Social Performance or Legitimacy Strategy?

This study examines the relation between firms’ corporate philanthropic giving and their performance in three other social domains – employee relations, environmental issues, and product safety. Based on a sample of 384 U.S. companies and using data pooled from 1998 through 2000, we find that worse performers in the other social areas are both more likely to make charitable contributions and that the extent of their giving is larger than for better performers. Analyses of each separate area of social performance, however, indicate that the relation between giving and negative social performance (cited concerns) only holds for the environmental issues and product safety areas. We find no significant association between corporate philanthropy and employee relations concerns. In general, these findings suggest that corporate philanthropy may be more a tool of legitimization than a measure of corporate social responsibility.     

Does community and environmental responsibility affect firm risk? Evidence from UK panel data 1994–2006

The question of how an individual firm's social and environmental performance impacts its firm risk has not been examined in any empirical UK research. Does a company that strives to attain good environmental performance decrease its market risk or is environmental performance just a disadvantageous cost that increases such risk levels for these firms? Answers to this question have important implications for the management of companies and the investment decisions of individuals and institutions. The purpose of this paper is to examine the relationship between corporate environmental performance and firm risk in the British context. Using the largest dataset assembled so far, with community and environmental responsibility (CER) rankings for all rated UK companies between 1994 and 2006, we show that a company's environmental performance is inversely related to its systematic financial risk. However, an increase of 1.0 in the CER score is associated with only a 0.028 reduction in its β.     

Bridging the gap: How sustainable development can help companies create shareholder value and improve financial performance

This study examines the effect of integrating sustainability into corporate strategy on various aspects of shareholder value creation and financial performance in the British capital market. The employed method is based on the content analysis of corporate disclosures and a new technique for assessing the adoption of the corporate sustainability concept (embracing the environmental, social, and financial aspects of a company's policies at the same time). Using extensive data of FTSE 350 firms covering the years 2006–2012, 65 companies were selected as meeting corporate sustainability criteria. For the above period, we find that these firms were characterized by higher financial risk exposure, lower asset growth rates, lower BV/MV ratios, lower EVA ratios, and higher MVA ratios. Such relations were generally present among different size and industry groupings. The results support the thesis that firms that incorporate sustainability issues into their business operations are better able to leverage their resources toward stronger financial performance and shareholder value creation than other companies. The paper contributes to the literature by offering a more holistic approach to corporate sustainable performance measurement and shedding additional light on its relation to financial performance in the context of the recent global financial crisis and its direct aftermath.     

When corporate social responsibility (CSR) increases performance: exploring the role of intrinsic and extrinsic CSR attribution

This study investigates whether employees attribute different motives to their organization's corporate social responsibility (CSR) efforts and if these motives influence employee performance. Specifically, we investigate whether employees could distinguish between intrinsic and extrinsic CSR motives by surveying 229 employee–supervisor dyads from various industries (companies that have reputable CSR programs in Portugal), and the impact of these perceptions on in‐role and extra‐role performance of subordinates. We found that employee task performance increases when employees attribute both intrinsic and extrinsic motives for CSR. Moreover, when employees perceive that their organization invests in a CSR practice that is both intrinsic and extrinsic, they also tend to exert extra effort in their work. Theoretical and practical implications are also discussed alongside future research directions.     

Is Corporate Governance in China Related to Performance Persistence?

This paper examines the relationship between performance persistence and corporate governance (as proxied for by board characteristics and shareholder structure). We document systematic differences in performance persistence across listed companies in China during 2001–2011, and empirically demonstrate that firms with better corporate governance show higher performance persistence. The results are robust over both the short and long terms. We also find that performance persistence is an important factor in refinancing, and it can lower companies’ costs of borrowing. Overall, our findings offer important implications for business ethics, as we demonstrate how corporate governance can lower companies’ costs of debt.     

Company Support for Employee Volunteering: A National Survey of Companies in Canada

Company support for employee volunteerism (CSEV) benefits companies, employees, and society while helping companies meet the expectations of corporate social responsibility (CSR). A nationally representative telephone survey of 990 Canadian companies examined CSEV through the lens of Porter and Kramer’s (2006, ‘Strategy and society: the link between competitive advantage and corporate social responsibility’, Harvard Business Review, 78–92.) CSR model. The results demonstrated that Canadian companies passively support employee volunteerism in a variety of ways, such as allowing employees to take time off without pay (71%) or adjusting their work schedules (78%). These Responsive CSR efforts contribute to the company’s value chain by enhancing employee morale, a perceived CSEV benefit. More active forms of support requiring company time or money are less common; for example, 29% allow time off with pay. Companies perceive that support for employee volunteering enhances their public image, a Responsive CSR strategy when employed to ameliorate a damaged reputation or a Strategic CSR strategy when contributing to a competitive position. A minority perceive challenges like covering the workload. Many companies target and/or exclude particular causes and link CSEV efforts with other philanthropic donations, suggesting a Strategic CSR application of CSEV. Where programs exist, they frequently are neither tracked nor evaluated, suggesting that companies are not using these programs as strategically as they might.     

The Influence of Internal and External Codes on CSR Practice: The Case of Companies Operating in Serbia

In this article, our aim is to examine the difference between the corporate social responsibility (CSR) practice of the multinational companies (MNCs) and of the domestic companies operating in Serbia, as well as the influence of internal self-regulations such as statements of corporate values and codes of conduct, and external self-regulations such as the implementation of the ISO 9001 and ISO 14001 standards on CSR practice. The CSR practice is observed in five CSR areas: employee relations, customer relations, environmental practice, community and social involvement, and transparency in business activity. The findings indicate that the CSR practice of the MNCs is significantly different in comparison to domestic companies only in the area of employee relations. Furthermore, the overall results suggest that internal self-regulations have more influence on CSR practice than the implementation of generic management system standards. However, the existence of transparent corporate values, codes of conduct and implemented management systems according to ISO 9001 and ISO 14001 standards does not prove to be strong predictors of CSR performance.     

In search of the roots of corporate reputation management: Being a consistent corporate social performer

Corporate social performance (CSP) has received a particularly high share of attention as one of the main determinants of corporate reputation. However, few studies have tested the extent to which the relationship between CSP and corporate reputation may be affected by industry, country, or other context-related variables. Besides, some conceptual thinking suggests that the impact of CSP on corporate reputation may vary according to the level of consistency of a firm's behaviors. However, this view has not been empirically addressed. For this reason, the main objective of this study is to explore the impact of consistency in CSP management on corporate reputation. Specifically, we analyze both the effect of CSP internal consistency (or consistency between environmental and social performance) and CSP consistency over time on corporate reputation. The results based on data from an international sample of 133 companies for the period 2011 to 2016, support either CSP internal consistency or CSP consistency over time (positive increment of CSP over time) positively affecting corporate reputation. The results also confirm the moderation effect of CSP internal consistency on the relationship between CSP and corporate reputation. These results reveal that consistency in social responsibility management helps a firm to consolidate its corporate reputation.     

EDITOR'S COMMENTS

ABSTRACT

The key to improving pricing methods lies in establishing a clear relationship between the price paid by customers and the value received. A company's understanding of how a decision in its pricing policy will affect the perceptions its potential consumers will have of these prices, is fundamental if it wishes to make sure that its offer is properly perceived. Thus, if companies identify the rules used by purchasers to price their products, they will be successful in getting the objective signal they send via their communication strategies to be perceived in the desired manner. This analysis shows that both monetary and non-monetary costs are considered by consumers when determining the final cost perception associated with the acquisition of a good, and that the understanding of the internal reference price is essential for determining the nominal price effect on the monetary component of total sacrifice.     

Give everyone a prize? Employee stock options in private venture-backed firms

This study examines employee stock options in private entrepreneurial companies. I focus on private U.S. venture-backed firms because they are renowned for the intensity and organizational depth of their stock option grants. Contrary to simple stereotype, however, I show that 27% of U.S. venture-backed firms do not grant stock options to all employees. I seek to explain this by theorizing that the economic and legal settings in which venture-backed companies exist lead to both costs and benefits from the use of stock options to attract, compensate, incent, monitor, and retain certain employees, and that sometimes the costs exceed the benefits. I test the theory by determining whether variation in the organizational depth to which venture-backed firms grant employee stock options can be explained by proxies for these economic and legal costs. Such proxies include the fraction of employees who are in technical positions; the degree of flatness in the firm's organizational structure; its proximity to other venture-backed companies; the number of patents it has been granted; and the fraction of equity held by venture investors. The results support the theory and thereby imply that venture-backed firms grant employee stock options in an economically sophisticated manner.     

The double bottom line: Profit and social benefit

There is an important shift in business focus in the United States that is empowering companies to not only declare their intent to be ethical firms which do good while making a profit, but also to submit proof of that commitment for annual review by outside evaluators. A new business model is providing structure for non-profits that wish to grow, for for-profits that wish to be socially responsible, and for individuals who wish to invest in companies with a commitment to corporate social responsibility and sustainability. B Lab has taken the lead in providing the models necessary for this shift to a focus on the double bottom line: profit and social benefit. It has created the legal documents for state legislatures to use to pass a new corporate structure called the ‘benefit corporation.’ In the 3 years of its existence, legislatures in 19 states and the District of Columbia have ratified the new corporate structure. Likewise, B Lab offers a performance assessment program to become a Certified B Corporation, independent of legal corporate status, which also serves as an evaluation program for benefit corporations. Additionally, it has created a ratings agency and analytics platform, the Global Impact Investing Rating System (GIIRS), to help institutional investors evaluate the impact of companies’ corporate social responsibility initiatives. This article discusses the requirements and benefits of the new models and addresses the issues that have been raised about them. It also identifies companies that are incorporating the benefit corporation structure and are becoming Certified B Corporations.     

有违约风险贷款担保价值研究

在发达国家政府是贷款担保的主要担保人,对贷款担保定价研究的重要假设是担保人没有违约风险。在中国,绝大多数的贷款担保人有违约风险。本文研究了担保人有违约风险情况下提供担保和相互担保的财务特征和定价,对比分析了提供担保和相互担保行为对贷款担保人和银行价值的影响。研究表明,有违约风险担保的价值随着担保人公司价值和借款额的增大而增大,随着借款公司价值的增大而减少;银行的损失随着借款额的增大而增大,随着担保人公司价值和借款人公司价值的增大而减少。银行提供贷款时允许企业相互担保等于潜在为相互担保企业提供了免费的部分担保,随着借款人风险的增大,相互担保条件下的银行或有损失急剧增大,相互担保对于银行的价值有显著的负面影响。     

Do Investors Value a Firm’s Commitment to Social Activities?

Previous empirical research has found mixed results for the impact of corporate social responsibility (CSR) investments on corporate financial performance (CFP). This paper contributes to the literature by exploring in a two stage investor decision-making model the relationship between a firm’s innovation effort, CSR, and financial performance. We simultaneously examine the impact of CSR on both accounting-based (financial health) and market-based (Tobin’s Q) financial performance measures. From a sample of top corporate citizens, we find that: (1) a firm’s social responsibility commitment (CSR) contributes to its financial performance; (2) after controlling for investment in innovation activities, CSR continues to have a positive impact on a firm’s financial performance; (3) the customer dimension of CSR has a positive effect on both CFP measures, whereas the employee dimension indicates a significant impact only on financial heath; and (4) the community relation dimension of CSR only affects the market-based CFP measure of firms with high innovation intensity.     

企业社会责任对员工角色外行为的影响机制

文章旨在揭示企业社会责任对内部利益相关者的行为的影响效果及影响机制,为此,把员工角色外行为作为结果变量,把员工关于企业社会责任的共享知觉(企业社会责任)作为自变量,把员工对组织的信任(组织信任)作为中介变量,探讨企业社会责任对员工角色外行为的直接影响,以及组织信任在两者之间的中介效应。通过对80家企业的696名在职员工进行问卷调查,采用多层线性模型技术对样本数据进行统计分析,文章研究发现,员工关于企业自发责任(针对社会和非社会组织、消费者和员工的责任)的共享知觉对员工角色外行为有显著的影响,而且组织信任在两者关系中起部分中介作用,相反,员工关于企业基本责任(对政府的责任)的共享知觉对员工角色外行为的影响不显著,对组织信任的影响也不显著。基于研究结论,文章提出了相应的管理建议和未来的研究方向。     

Corporate governance mechanisms and financial performance in China: panel data evidence on listed non financial companies

The objective of this paper is to provide empirical evidence on the influence of corporate governance characteristics and corporate ownership concentrations on the financial performance of Chinese companies. This is based on analysis of a panel data set covering the years 2001 to 2005. The characteristics considered are the ratios of independent directors and professional supervisors on the companies' two boards, and the level of concentration in and type of ownership of the companies. Our chosen performance metric is Tobin's Q. We find that ownership concentration in general is a significant factor in determining firm performance. The degree of board independence is significant, but it only appears to have a positive impact on performance in larger companies. The expertise of the supervisory board is not a significant determinant of corporate financial performance in China. Our findings support a continued focus on making improvements to the operation and effectiveness of China's institutions of corporate governance.     

人力资本产权实现方式与公司绩效的内生性因素研究

随着人力资本对经济效益和公司绩效的影响越发显著,人们越发重视人力资本对公司绩效的影响。基于内生性因素视角下对人力资本产权实现方式与公司绩效的影响进行的研究表明,人力资本产权实现方式驱动公司绩效的因素主要有雇佣薪酬、股权性收益、参与权、控制权,公司绩效影响人力资本产权实现方式选择的因素则有增长机会、行业竞争程度、公司规模和生命周期等。研究进一步显示:将人力资本产权实现与公司绩效相关关系具体化,可以找出更具经济效益的人力资本产权实现方式,从而促进公司绩效的提升。     

Corporate governance in emerging markets: A survey

This paper reviews recent research on corporate governance, with a special focus on emerging markets. It finds that better corporate governance benefit firms through greater access to financing, lower cost of capital, better performance, and more favorable treatment of all stakeholders. Numerous studies show these channels to operate at the level of firms, sectors and countries—with causality increasingly often clearly identified. Evidence also shows that voluntary and market corporate governance mechanisms have less effect when a country's governance system is weak. Importantly, how corporate governance regimes change over time and how this impacts firms are receiving more attention recently. Less evidence is available on the direct links between corporate governance and social and environmental performance. The paper concludes by identifying issues requiring further study, including the special corporate governance issues of banks, and family-owned and state-owned firms, and the nature and determinants of public and private enforcement.     

Employer branding and CSR communication in online recruitment advertising

While multiple studies have discussed the importance of corporate social responsibility (CSR) in recruiting, two important but unaddressed questions constrain the understanding and practice of presenting firms’ socially conscious efforts to their prospective employees. First, are companies engaged in CSR communicating their CSR practices effectively in online recruitment advertising? And second, what CSR information should companies include in online job advertisements to improve their employer attractiveness to prospective candidates? The findings of this study show that CSR communication in recruitment advertising is often limited, an ad-hoc practice, and mostly focused on company practices concerning employee participation and development. Even companies with a great CSR reputation take surprisingly little advantage of their CSR image when it comes to attracting job candidates. To improve employer attractiveness, we recommend that human resources managers consider (1) optimizing the structure of online job advertisements by including a company overview section in which CSR information can be presented easily, (2) expanding the scope of CSR dimensions in job advertisements to include environmental performance and community relations, (3) offering information about opportunities for employee engagement with CSR, and (4) adopting a strategic approach to the inclusion of CSR content in online job advertisements.