Institutional blockholder, exit threats, and firms CSR performance

Abstract

This research examines the role of blockholders in shaping corporate social responsibility (CSR) practices within A-share listed companies in China over the period of 2006–2019. Our analysis reveals that non-financial blockholders significantly promote CSR initiatives, while the influence of financial blockholders appears negligible. The study also uncovers the pivotal role of stock liquidity as a moderator in the dynamic between blockholders and CSR, suggesting that the exit threat is provital mechanism through which non-financial blockholders exert their influence on CSR activities. These findings are robust, having addressed potential endogeneity issues through a series of rigorous methodologies including the examination of exogenous shocks, the application of the Propensity Score Matching-Difference in Differences (PSM-DID) model, deployment of multi-dimensional fixed effects models, and Change Regression analysis.