Corporate Social Responsibility and Corporate Governance: Evidence from China

At present, Corporate Social Responsibility (CSR) and Corporate Governance (CG) are both controversial topic. In this paper, the authors investigate two questions. Since CSR and CG can both reduce capital constrains, the authors try to figure out which one is more powerful. Then, they want to know whether CSR and CG can impact each other and how it works. Using the data from the Listed Companies of China, they find out that CSR is more powerful than CG in reducing the capital constrains. Furthermore, the authors find out that CSR can result in the improvementof CG, but not vice versa through the Granger Causality Test. This implies that managers should consider social responsibility more than purely pursing profits when make a decision about development.