How does CEO tenure affect corporate social and environmental disclosures in China? Moderating role of information inter
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RESEARCH ARTICLE
How does CEO tenure affect corporate social and environmental disclosures in China? Moderating role of information intermediaries and independent board Talat Mehmood Khan 1
&
Bai Gang 1 & Zeeshan Fareed 2 & Anwar Khan 3
Received: 15 June 2020 / Accepted: 18 October 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract The present study provides empirical evidence on how chief executive officer (CEO) tenure influences the corporate social and environmental disclosures (CS&ED) of all listed non-financial Chinese firms from 2008 to 2016. We used fixed-effect panel data regression model to test our hypothesis. The findings show a negative impact of CEO tenure on CS&ED. Our study provides evidence that CS&ED increases in the early service tenure of CEOs than in their later service periods, as the early increase followed by a decline indicates the presence of non-linear inverted U-shaped association between CEO tenure and disclosure practices. In further analyses, we find that the negative effect of CEO tenure on CS&ED is more pronounced for the firms having a larger number of information intermediaries and independent directors, such as higher level of institutional ownership, analyst’s coverage, and more independent directors in a firm. We found the stronger and robust outcomes after controlling the endogeneity problem. In conclusion, this study can be useful for policymakers to link CS&ED with firm economic practices to attain sustainable development goals. Moreover, CS&ED implementation can be an effective means for the managers to mitigate career-concerns. Keywords Corporate Social and Environmental Disclosures . CEO Tenure . Signalling . Inverted U-shaped . Stakeholder
Introduction Responsible editor: Eyup Dogan * Talat Mehmood Khan [email protected] Bai Gang [email protected] Zeeshan Fareed [email protected] Anwar Khan [email protected] 1
School of Finance, Southwestern University of Finance and Economics 55, Guanghua Street, Chengdu 611130, China
2
School of Business, Huzhou University, Huzhou, Zhejiang, China
3
The West Center for Economics Research, Southwestern University of Finance and Economics 55, Guanghua Street, Chengdu 611130, China
In recent years, corporate social and environmental disclosures (henceforth, CS&ED) has attained widen attention from researchers all over the world. The CS&ED has integrated with different topics such as firm performance (Cheng et al. 2015; Ikram et al. 2019a, b, 2020a, b), corporate governance (Li and Zhang 2016), ethics and slandered values (Abeysuriya et al. 2007; Teck Hui 2008), social-economic and institutional monitoring (Ball and Craig 2010), and many other disciplines. The concept of CS&ED works to make the organization responsible for society and environment so that all the beneficiaries collectively progress and should not be abused from their actions. According to the Global Reporting Initiative (GRI) guidelines, companies should inform all the stakeholders concerning the effect of their operati
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