Using data on Chinese A-share listed firms from 2008 to 2017, we explore how corporate social responsibility (CSR) performance is affected by managerial short-termism and what factors influence the association between the two. First, by employing text analysis in conjunction with machine learning, we construct a new managerial short-termism indicator. Using panel fixed models, we find that managerial short-termism has an adverse impact on CSR performance, and the results are consistent in a series of robustness checks. The heterogeneous test results show that the negative effect is significant only for firms with lower internal corporate governance, for firms in less competitive industries, for firms with less analyst attention, and for state-owned enterprises (SOEs). Additionally, a better institutional environment weakens the negative impact of managerial short-termism on CSR performance. The findings shed light on policy implications for emerging countries.
Xu Xiaohui, Yang Jun
CSR performance, Managerial short-termism, Random forest regression