Spirit of corporate social responsibility transforming from corporatism to socialized capitalism

This paper offers a critique of current corporate social responsibility (CSR) practices in context of global trends. The legitimate modelling of CSR has yet to engage firm and political decision making with wider Society stakeholders. There is urgent need to transform towards socialized capitalism in which separate CSR board may focus on social and environmental concerns and offer more collaborative solutions to global/local CSR issues. This is underpinned with a need for returning to original moral purpose of CSR that has become eroded by narrower short term rational justifications.

The effects of corporate and country sustainability characteristics on the cost of debt: an international investigation

We investigate the relationship between corporate and country sustainability on the cost of bank loans. We look into 470 loan agreements signed between 2005 and 2012 with borrowers based in 28 different countries across the world and operating in all major industries. Our principal findings reveal that country sustainability, relating to both social and environmental frameworks, has a statistically and economically impactful effect on direct financing of economic activity. An increase of one unit in a country's sustainability score is associated with an average decrease in the cost of debt by 64 basis points. Our international analysis shows that the environmental dimension of a country's institutional framework is approximately twice as impactful as the social dimension, when it comes to determining the cost of corporate loans. On the other hand, we find no conclusive evidence that firm-level sustainability influences the interest rates charged to borrowing firms by banks. Our main findings survive a battery of robustness tests and additional analyses concerning subsamples, alternative sustainability metrics and the effects of financial crisis.

Do investors care about corporate tax?

This paper conducts a comprehensive examination of the link between corporation tax payment and financial performance in the UK. We find no discernible link between tax rates and stock returns for the UK, no matter how tax payment is measured. This is true throughout the sample period and for both customer-facing and non-customer-facing companies. However, allowing for industry norms and a host of firm characteristics, companies with lower effective tax rates have significantly higher levels of stock market risk. Firms that are reported in the newspapers in a negative way in relation to their level of corporation tax payment experience small negative stock returns, which are partially reversed within a month. However, the initial negative effects and subsequent rebound are both more pronounced for smaller companies. News announcements of the potential involvement of a firm in a corporate inversion (expatriation) result in steeper and much longer-lasting falls in share prices, whereas news stories of a more general nature relating to a firm's tax avoidance or tax payments have little noticeable effect.

State ownership, bank loans, and corporate investment

We study the effect of bank loans on Chinese publicly listed firms' investment decisions based on the underinvestment and overinvestment theories of leverage. Evidence from China is of particular importance because China is the world's largest emerging and transitional economy. At first we show that there is a negative relationship between bank loan ratios and investment for Chinese publicly listed firms. And this negative relationship is much stronger for firms with low growth than firms with high growth. Secondly, we find that both short-term and long-term loan ratios are negatively correlated with investment. However, the higher the long-term loan ratios are, the weaker the negative relationship between long-term loan ratios and investment is. Thirdly, firm ownership only matters to the effect of short-term bank loans on investment in our sample. That is, the negative relationship between short-term loan ratios and investment is weaker for SOEs than for non-SOEs. Lastly, we show that the reform of China's banking system in 2003 has not strengthened the negative relationship between bank loans and investment. Our findings suggest that although Chinese state-owned banks are severely intervened by government policies, they still have a disciplining role on firms' investment, especially in firms with low growth.

Doing well by talking good? A topic modelling-assisted discourse study of corporate social responsibility

Using the novel technique of topic modelling, this paper examines thematic patterns and their changes over time in a large corpus of corporate social responsibility (CSR) reports produced in the oil sector. Whereas previous research on corporate communications has been small-scale or interested in selected lexical aspects and thematic categories identified ex ante, our approach allows for thematic patterns to emerge from the data. The analysis reveals a number of major trends and topic shifts pointing to changing practices of CSR. Nowadays ‘people’, ‘communities’ and ‘rights’ seem to be given more prominence, whereas ‘environmental protection’ appears to be less relevant. Using more established corpus-based methods, we subsequently explore two top phrases - ‘human rights’ and ‘climate change’ that were identified as representative of the shifting thematic patterns. Our approach strikes a balance between the purely quantitative and qualitative methodologies and offers applied linguists new ways of exploring discourse in large collections of texts.