Corporate social responsibility performance and information asymmetry: the moderating role of ownership concentration

Abstract

Purpose This paper aims to examine the moderating effect of ownership concentration on the relationship between corporate social responsibility performance (CSRP) and information asymmetry using a sample of Chinese firms. Design/methodology/approach The authors use a sample of 208 listed firms from nine different sectors in China over the period of 2008–2018. They use the generalized method of moment approach to examine the dynamic relationship between CSRP, information asymmetry and ownership concentration. CSRP index is constructed using environmental performance, social performance and corporate governance performance measures. Findings The results indicate that CSRP positively affects the information asymmetry. Moreover, by taking ownership concentration as a moderating variable, the results indicate that ownership concentration negatively moderates the association between CSRP and information asymmetry. Research limitations/implications The findings of the study advance the understanding of CSR practices in China. The findings have important implications for the regulators and managers in China for adopting socially responsible activities for the improvement of firm performance and protecting shareholder rights. Originality/value The study extends the existing research on the association between CSRP and information asymmetry by including the ownership concentration as a moderating variable. The research showed that CSR plays an important role in reducing the informational gap between managers and outside stakeholders. However, the relationship between CSR and information asymmetry is not studied yet with the moderating role of ownership concentration.