Assessing corporate social and ﬁnancial
performance in China
Denise Luethge and Helen Guohong Han
Purpose – This study aims to examine corporate social responsibility disclosure (CSD) in China.
Design/methodology/approach – The paper examines the extent to which ﬁrm size and ﬁnancial
performance impacts social disclosure by examining published ﬁnancial information and social
disclosure information in annual reports.
Findings – Results indicate a positive relationship between ﬁrm size and disclosure but no relationship
between ﬁrm proﬁtability and disclosure.
Research limitations/implications – Only 2008 annual reports with a relatively small sample size are
used. Longitudinal studies in the future may be warranted.
Practical implications – CSD has become widespread in the west but is only now taking hold in the
east. As many global ﬁrms expand operations in China, this paper will add to research in the area
addressing CSD in that country.
Originality/value – Most studies have examined CSD in the west. This study makes a contribution to the
corporate social responsibility literature by investigating an emerging market in China.
Keywords Corporate social disclosure, Firm size, Financial performance, China, Disclosure
Paper type Research paper
urning on the television or radio, chances are that we will hear the words ‘‘going
green’’. Indeed, green management has become so popular that it is not only a
pressing media item, but has also become an important academic construct. In the
management literature, it is considered part of corporate social responsibility (in short, CSR,
Klein and Dawar, 2004). According to McWilliams and Siegel (2001), corporate social
responsibility is deﬁned as ‘‘actions that appear to further some social good, beyond the
interests of the ﬁrm and that which is required by law’’ (p. 117).
There are many companies, such as the Body Shop, Marks & Spenser, Starbucks and
Whirlpool, that truly impact their employees’ lives, the communities in which they operate
and the world at large with a variety of CSR activities ranging from civic involvement to
environmental stewardship to corporate philanthropy. These companies see CSR as much
more than a cost in the business environment, but as a strategic tool in which they can boost
performance, attract the best employees and motivate and inspire the leaders of both today
and tomorrow (Guarnieri and Kao, 2008).
Much has been written over the past two decades about corporate reporting of
environmental and social aspects of ﬁrm performance. Although it is commonly accepted
that the main goal of an organization is to make a proﬁt, there has been much discussion
over the past several decades of the broader responsibilities of corporations beyond their
stockholders to all of their stakeholders. These responsibilities go further than ﬁnancial
performance to look at the moral obligations of social and environmental performance in
what has been termed the ‘‘triple bottom line’’ (Elkington, 1999; O’Donovan, 2002; Shocker
and Sethi, 1973). As a result, many ﬁrms are reporting their actions with regard to corporate
DOI 10.1108/17471111211247965 VOL. 8 NO. 3 2012, pp. 389-403, Q Emerald Group Publishing Limited, ISSN 1747-1117
SOCIAL RESPONSIBILITY JOURNAL
Denise Luethge is
Professor and Chair of the
the Department of
Kentucky, USA. Helen
Guohong Han is an
Assistant Professor in
Management in the
Youngstown, Ohio, USA.
The authors would like to thank
the Editor and two anonymous
reviewers for their comments on
an earlier version of this paper.