CSR Performance and Cash Dividends in China
39 Pages Posted: 7 Aug 2018
Date Written: August 7, 2018
This study examines whether corporate social responsibility (CSR) performance is a driver of cash dividends in China. Using 10,483 firm-year observations over the period 2010–2015, we document a positive relationship between CSR and cash dividends in China. This is consistent with the ‘earnings channel’ view by Cheung et al. (2016) that CSR activities are positive NPV projects that increase earnings and hence dividends. The effects are lessened in firms operating in environmentally sensitive industries and during the 2014–215 period following the introduction of a new environmental law in China. We also find that the CSR–cash dividend relationship differs when we incorporate the influence of insider, institutional and governmental ownership in this relationship. Our findings are robust to various approaches to address endogeneity.
Keywords: CSR Performance,Cash Dividends, China
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