Does corporate governance moderate the effect of corporate social responsibility on a firm’s financial performance?

  • Received October 20, 2022;
    Accepted December 22, 2022;
    Published December 28, 2022
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  • Article Info
    Volume 20 2022, Issue #4, pp. 588-601
  • Cited by
    6 articles

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This work is licensed under a Creative Commons Attribution 4.0 International License

Drawing on the agency and resource dependence theories, the paper assumes that the impact of corporate social responsibility on companies’ financial performance should be investigated not in a binary manner but against the backdrop of corporate governance. The analysis is based on testing the dataset retrieved from the Chinese Stock Market and Accounting Research database containing 28,200 company-year observations of 3,576 Chinese listed companies covering 2008–2019. The findings accentuate that corporate social responsibility, interacting with board size, equity concentration, and CEO duality, positively impacts a firm’s financial performance. In contrast, the study fails to substantiate the claim that board gender diversity and board independence moderate the bond between corporate social responsibility and financial performance. Thus, by exploring five elements of corporate governance, this study takes a step forward in understanding exactly which elements of corporate governance best suit corporate social responsibility to enhance financial performance in China’s institutional settings. This study assists in filling the gap in corporate social responsibility research by displaying and corroborating the moderating effects of corporate governance attributes on the nexus between corporate social responsibility and financial performance in China. Therefore, this paper presents valuable information and details for companies and regulators alike to improve the impact of corporate social responsibility on financial performance by focusing on corporate governance quality.

This paper is co-funded by European Union through the European Education and Culture Executive Agency (EACEA) within the project “EU Best Practice Of Life Cycle Assessment, Social, Environmental Accounting And Sustainability Reporting 101047667 – EULASTING – ERASMUS-JMO-2021-HEI-TCH-RSCH” (

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    • Table 1. Sample selection process
    • Table 2. Industry distribution of the sample
    • Table 3. Variables definition
    • Table 4. Descriptive statistics
    • Table 5. Pearson correlation test
    • Table 6. Regression results
    • Table 7. Effects of corporate governance attribute on CSRD and FP interaction
    • Conceptualization
      Oleh Pasko
    • Data curation
      Oleh Pasko, Lesia Riabenko, Nataliia Gerasymenko
    • Investigation
      Oleh Pasko, Nataliia Kudlaieva, Lesia Riabenko, Nataliia Gerasymenko
    • Methodology
      Oleh Pasko, Nataliia Kudlaieva
    • Project administration
      Oleh Pasko
    • Supervision
      Oleh Pasko
    • Visualization
      Oleh Pasko, Lesia Riabenko, Nataliia Gerasymenko
    • Writing – original draft
      Oleh Pasko, Nataliia Kudlaieva
    • Writing – review & editing
      Oleh Pasko
    • Formal Analysis
      Nataliia Lagodiienko, Nataliia Kudlaieva, Lesia Riabenko
    • Validation
      Nataliia Lagodiienko, Lesia Riabenko, Nataliia Gerasymenko