Do regulatory mechanisms affect corporate social performance? Evidence from emerging economies

This study examines the impact of corporate governance mechanisms on corporate social performance. The amount a given country spends on corporate social responsibility activities varies due to various motives. Therefore, the objectives of the study involve examining the impact of board characteristics and ownership structure on corporate social responsibility. Based on a panel data regression, this study finds that board size is positively related to corporate social performance (social performance and environmental performance) in the Chinese context. In the case of India and South Africa, board size exhibits a negative relationship, which is inversely related to China. CEO duality is positively related to firms' corporate social performance in India and China. However, in the context of South Africa, it exhibits a negative relationship. Gender diversity has positive impact in India and South Africa, wherein in case of China it is inversely related. It is observed that women on the board and women directors significantly influence corporate social responsibility spending. Moreover, among the ownership structure, family ownership is positively related to corporate social responsibility in the India and South Africa. The institutional investors have a negative impact in South Africa and a positive impact in India and China. This study supports the stewardship theory and agency theory and finds that firms should spend on corporate social responsibility activities to protect the interests of the stakeholders and the role of firms' responsibilities towards different sectors of society. Finally, this study provides insights into the state-of-the-art literature and offers practical implications for top-level management and shareholders.