Black and White?An Inverted U-shape Relationship between Corporate Social Responsibility and Financialization of Non-financial Enterprises
What role does corporate social responsibility play in the financialization of non-financial enterprises in China?Existing research presents two opposing answers to the question:financial tools and governance tools.This paper holds that the relationship between corporate social responsibility and the financialization of non-financial enterprises is more likely to be an inverted U-shape rather than black and white.This means that low-level social responsibility performance is a financial tool to promote the financialization of non-financial enterprises,and high-level social responsibility is a governance tool that inhibits this financialization.Empirical tests using the data of A-share listed companies from 2010 to 2021 support the above argument.The study finds that the level of social responsibility performance of most listed companies is still in the range of financial rather than governance tools.Heterogeneity tests show that the inverted U-shaped relationship does not exist for non-state-owned enterprises,small and medium-sized enterprises,and enterprises with low institutional holdings.The test of the motivation and effect of social responsibility on the investment of physical capital shows that it is reasonable to judge different levels of social responsibility performance as governance or financial tools.
corporate social responsibilityfinancialization of non-financial enterprisesfinancial toolsgovernance toolsinverted U-shape
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