Author: Yasir Shahab
, Collins G Ntim & Farid Ullah
Summary:
We examine the effect of corporate social responsibility (CSR) quality ratings on the financial distress levels of Chinese enterprises by using the previously unexplored new China-specific Altman -˜ZChina Score’s in the context of CSR and data from 749 firms over the 2009-“2014 period. First, we find that CSR quality ratings significantly reduce Chinese firms’s distress levels. Second, we find that the ability of CSR to reduce distress levels in non-state-owned Chinese firms is higher than state-owned ones. Finally, we find similar results when we divide the data into high-low CSR ratings and levels of distress. Our results are robust to potential endogeneities.
