Nataliia Gerasymenko

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.

Acknowledgment
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” (https://bit.ly/3Bbvquw).

The paper delves into the relationship between accounting conservatism, valued by financial stakeholders, and corporate social performance (CSP), esteemed by non-financial stakeholders. This study assesses the potential impact of financial reporting practices, specifically accounting conservatism, on a firm’s CSP activities, which has significant implications for diverse stakeholders. Employing an accrual-based proxy for accounting conservatism and the social contribution value per share from the Shanghai Stock Exchange as a proxy for CSP, the study utilizes a sample of 25,490 year-company observations of A-share listed companies on China’s Shanghai and Shenzhen stock exchanges spanning from 2008 to 2019. Empirical findings indicate a negative correlation between accounting conservatism and CSP. The study suggests that higher levels of social performance are associated with reduced conservatism in financial reporting, indicating that firms prioritize CSP over the interests of financial stakeholders by adopting less conservative financial reporting policies. Aligned with agency theory, these results underscore that socially responsible firms are less inclined to employ accounting conservatism in reporting earnings. This study establishes a connection between firms’ unconventional and less traditional activities, such as CSP, and conservative financial reporting, offering valuable insights for investors, analysts, and regulators.

Acknowledgment
This paper is co-funded by the European Union through the European Education and Culture Executive Agency (EACEA) within the project “Embracing EU corporate social responsibility: challenges and opportunities of business-society bonds transformation in Ukraine” – 101094100 – EECORE – ERASMUS-JMO-2022-HEI-TCH-RSCH-UA-IBA / ERASMUS-JMO-2022-HEI-TCHRSCH https://eecore.snau.edu.ua/