Corporate Social Responsibility, Corporate Performance, and Pay-Performance Sensitivity—Evidence from Shanghai Stock Exchange Social Responsibility Index

Yuan Chang, Ting Hsuan Chen, Min Cheng Shu

Research output: Contribution to journalArticle

5 Citations (Scopus)


Based on annual data of listed companies on Shanghai Stock Exchange (SSE) through 2009–2013, this article examines three hypotheses: first, whether a firm’s taking corporate social responsibility (CSR) affects corporate performance; second, whether corporate governance and a firm’s age positively moderate the relationship between CSR and performance; and third, whether CSR positively moderates the magnitude/direction of linkage between a firm’s performance and top management/director compensation (pay-performance sensitivity, PPS). Three proxies for CSR engagement are constructed by a firm’s inclusion in the SSE Social Responsibility Index. Empirical evidence generally shows that firms engaging in CSR tend to obtain superior performance in terms of higher profitability. However, firm’s age and sound corporate governance have little additional benefit on the effect of a firm engaging in CSR on performance. Finally, greater CSR engagement is associated with larger PPS. Principal outcome does not shift under two-stage estimation and propensity score matching (PSM) to correct for sample self-selection of CSR engagement.

Original languageEnglish
Pages (from-to)1183-1203
Number of pages21
JournalEmerging Markets Finance and Trade
Issue number5
Publication statusPublished - 2018 Apr 9


All Science Journal Classification (ASJC) codes

  • Finance
  • Economics, Econometrics and Finance(all)

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