CSR Performance and Cash Dividends in China

39 Pages Posted: 7 Aug 2018

See all articles by Samuel Benjamin

Samuel Benjamin

University of Otago

Pallab Kumar Biswas

University of Otago

Bao Yang

Chongqing University of Technology (CQUT) - College of Accounting

Date Written: August 7, 2018

Abstract

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

Suggested Citation

Benjamin, Samuel and Biswas, Pallab Kumar and Yang, Bao, CSR Performance and Cash Dividends in China (August 7, 2018). 31st Australasian Finance and Banking Conference 2018. Available at SSRN: https://ssrn.com/abstract=3227831

Samuel Benjamin (Contact Author)

University of Otago ( email )

Commerce
Clyde Street
Dunedin, OR Otago 9016
New Zealand

Pallab Kumar Biswas

University of Otago ( email )

P.O. Box 56
Dunedin, Otago 9010
New Zealand
+64 3 679 8108 (Phone)

Bao Yang

Chongqing University of Technology (CQUT) - College of Accounting ( email )

No. 4 Xingsheng Road
Yangjiaping
Chongqing, 400050
China

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