Allocation of Decision Rights and CSR Disclosure: Evidence from Listed Business Groups in China

Corporate social responsibility (CSR) research has recently begun to focus on the CSR performance of business groups, with the scope shifting from group members to business groups in general. This paper focuses on whether business groups with centralized decision rights tend to disclose more CSR inf...

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Bibliographic Details
Published inSustainability Vol. 14; no. 7; p. 3840
Main Authors Cui, Rumeng, Ma, Zhong, Wang, Longfeng
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 01.04.2022
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Summary:Corporate social responsibility (CSR) research has recently begun to focus on the CSR performance of business groups, with the scope shifting from group members to business groups in general. This paper focuses on whether business groups with centralized decision rights tend to disclose more CSR information and investigates the heterogeneous effect of the number of subsidiaries. Using a dataset for listed groups in China from 2010 to 2020, our empirical test discovered that centralized decision rights could promote group CSR disclosure. For groups with many subsidiaries, centralization makes a more significant contribution to promoting CSR disclosure. The mechanism test revealed that this positive relationship between centralization and disclosure relies on efficient internal capital market allocation, a reduction in rent-seeking behavior of subsidiaries, and reputational concerns. Furthermore, we observed that the centralized decision rights influence on disclosure varies across different aspects of CSR, with a negative impact on “Social Contribution” and a positive impact on “Shareholder Responsibility”, “Employee Responsibility”, “Supplier, Customer, and Consumer Responsibility” and “Environmental Responsibility”. Centralized decision rights promote more CSR disclosures with voluntary disclosures, while regulatory disclosures have no significant effect. We research the allocation of decision rights and group CSR disclosure.
ISSN:2071-1050
2071-1050
DOI:10.3390/su14073840