Journal of Business Ethics

, Volume 138, Issue 4, pp 661–682 | Cite as

Market Reactions to the First-Time Disclosure of Corporate Social Responsibility Reports: Evidence from China

  • Kun Tracy WangEmail author
  • Dejia Li


We examine whether investors value the disclosure of first-time standalone corporate social responsibility (CSR) reports, and whether market valuations differ between government-controlled and privately controlled firms. Using a matched sample of Chinese publicly listed firms, we find that CSR initiators have higher market valuations than matched CSR non-initiators, and CSR initiators controlled by the central and local governments have lower market valuations than CSR non-initiators and CSR initiators controlled by private shareholders. Additional analyses demonstrate that CSR initiators with high CSR reporting quality and perceived credibility have higher market valuations than CSR initiators with low CSR reporting quality and medium or low perceived credibility of CSR reporting. We do not find convincing evidence that CSR mandate, litigation risk, and prior stock returns affect market reactions to CSR reporting. Overall, we find that the market values standalone CSR reports, and that CSR reporting quality and perceived credibility are important factors in market valuation.


Corporate social responsibility Performance Market value Ownership Government 

JEL Classification

G14 G32 M14 M41 P31 



We thank Albert Tsang, Mark Wilson, Greg Shailer, two anonymous reviewers, and workshop participants at the Australian National University and the Journal of Business Ethics Special Issue Conference on Business Ethics in Greater China for helpful comments. Kun Tracy Wang acknowledges financial support from the College of Business and Economics at the Australian National University (R62860 60B4).


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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.Research School of Accounting and Business Information SystemsThe Australian National UniversityCanberraAustralia

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