Corporate social responsibility and bank credit loans: Exploring the moderating effect of the institutional environment in China

Drawing on the signalling theory and stakeholder theory, this study extends the literature on corporate social responsibility (CSR) by examining the relationship between firms’ CSR performance and their access to bank credit loans, and specifically, by hypothesising that the institutional environment (framed as the level of financial development and of government intervention) moderates the signalling effect of this relationship. Using a sample of 554 Chinese listed firms with 2522 observations over the period 2009–2016, we provide robust evidence that better CSR performance of a firm is associated with greater access to bank credit loans, and that this positive relationship is more salient for long-term loans than for short-term ones. Regarding the moderating effect of institutional environment, we find that if the region a firm is located in has a higher level of financial development, the positive impact of CSR performance on access to bank credit loans is weakened. However, the positive relationship between CSR performance and access to bank credit loans is stronger for firms located in regions with less government intervention.