Does GRI Sustainability Reporting Pay Off? An Empirical Investigation of Publicly Listed Firms in China
Global Reporting Initiative (GRI) guidelines have emerged as an important instrument used by firms to structure the content of SR. This development has led to the question of whether the elaboration of GRI SR is beneficial to a firm’s financial performance.
In this study, building on signaling theory, we carry out an empirical investigation of the impact of GRI SR on firm profitability and the factors moderating that impact. Drawing from the China Stock Market and Accounting Research (CSMAR), the WIND Economic, and the Chinese Research Data Services Platform (CNRDS) databases, we identified a sample of 122 listed firms with GRI SR in China. We then employed an
event study method to compare the firms following GRI SR with a set of matched firms reporting sustainability without following the GRI guidelines.
The results show that GRI SR significantly increases firm profitability. Moreover, firms with local political ties reap more benefits from GRI SR, while the moderating effect of central political ties is not significant. Surprisingly, the performance impact of GRI SR is negatively correlated to the firm’s internationalization level.
About the speaker
Dr Lujie Chen
Dr. Lujie Chen is an Associate Professor of Management.
Her expertise is in the areas of Operations and Supply Chain Management as well as operations strategy. Her research interests mostly focus on sustainable supply chain management and innovation,supply chain finance, network-based service and business model innovation, supply chain integration, digital supply chain, big-data based supply chain and logistics optimization.
She has also provided training and consulting services for international and national business corporations.