Corporate social responsibility and firm-value: the role of sensitive industries and CEOs power in China

Using a large panel dataset of 861 listed Chinese firms, the present study investigates whether corporate social responsibility (CSR) affects firm-value. It examines the influence of five CSR dimensions on firm-value. Then, it pinpoints the moderating impact of industry-sensitivity and power concentration of the CEO. In contrast to developed economy's evidence, the results show an overall negative impact of CSR on firm-value. Looking closer at the dimensions separately, we find a negative impact of most of the CSR dimensions and a positive impact of some other CSR dimensions on firm-value. However, we observe that CSR enhances the value of firms operating in sensitive industries. Similarly, we find that a powerful CEO can also create firm-value through CSR by aligning CSR practices with the firms' objectives. Our results are sufficiently rigorous to alternate proxies of CSR.