Sustainability and Its Value: Does Corporate Social Responsibility Score Impact Financial Access? A Review of Chinese Manufacturing Firms

Abstract

Corporate social responsibility (CSR) in firms has shifted from just being responsible for the environment to strategic CSR by examining how the engagement of CSR activities enhance the company’s financial performance. The paper examine if corporate social responsibility rating impacts financial access and financial efficiency. This paper analyses the CSR performance of 23 Chinese firms' annual data from 2010 to 2016 and their access to credit from financial institutions. The fixed effects model shows that corporate social responsibility significantly correlates with corporate financial access constraints. That is, the higher score of corporate social responsibility, the lower degree of financing access constraints. The study also found that improving corporate social responsibility will reduce the financial efficiency of enterprises by a small margin. The company's financial cost will be relatively reduced as the corporate social responsibility score increases.