Scholarlink

<p>Previous studies have generally concluded that higher leverage inhibits firms from investing in corporate social responsibility (CSR). However, many excessively leveraged firms in China invest heavily in CSR, raising questions about whether this discrepancy arises from theoretical limitations or practical peculiarities. This study, grounded in China’s unique institutional context and the legitimacy perspective under institutional theory, aims to empirically investigate whether and when excess leverage affects CSR. Our goal is to provide a theoretical explanation for the unique phenomenon of China’s excess-leveraged firms investing substantially in CSR. We argue that excess leverage has a significant positive impact on CSR. This is because the adverse effects of excess leverage cause firms to lose legitimacy, which in turn drives firms to invest more in CSR, as CSR is an important legitimacy-regaining strategy. Moreover, we find that certain CEO characteristics—specifically, having a celebrity CEO, a party member CEO, or an ex-military CEO—exacerbate the legitimacy loss of excessively leveraged firms, thereby reinforcing the positive impact of excess leverage on CSR. Based on empirical tests on data from 2328 Chinese excess-leveraged listed firms from 2011 to 2021, we obtain empirical evidence in support of the above arguments.</p>

错误：搜索内容不能为空，请输入英文关键词
错误：关键词超出字数限制，请精简
高级检索

With higher leverage comes greater responsibility? Excess leverage and corporate social responsibility in China: the moderating role of CEO characteristics

  • 期刊论文

  • 发表日期：

    2025年2月1日

查看全文
  • Guangyu Huang,
  • Jinhua Li,
  • Liqiong Shen

摘要

Previous studies have generally concluded that higher leverage inhibits firms from investing in corporate social responsibility (CSR). However, many excessively leveraged firms in China invest heavily in CSR, raising questions about whether this discrepancy arises from theoretical limitations or practical peculiarities. This study, grounded in China’s unique institutional context and the legitimacy perspective under institutional theory, aims to empirically investigate whether and when excess leverage affects CSR. Our goal is to provide a theoretical explanation for the unique phenomenon of China’s excess-leveraged firms investing substantially in CSR. We argue that excess leverage has a significant positive impact on CSR. This is because the adverse effects of excess leverage cause firms to lose legitimacy, which in turn drives firms to invest more in CSR, as CSR is an important legitimacy-regaining strategy. Moreover, we find that certain CEO characteristics—specifically, having a celebrity CEO, a party member CEO, or an ex-military CEO—exacerbate the legitimacy loss of excessively leveraged firms, thereby reinforcing the positive impact of excess leverage on CSR. Based on empirical tests on data from 2328 Chinese excess-leveraged listed firms from 2011 to 2021, we obtain empirical evidence in support of the above arguments.