Short-selling deregulation and corporate social responsibility of tourism industry in China

Abstract

This study aims to examine the impact of short selling constraints on corporate social responsibility (CSR) of listed tourism companies in China. Based on the external governance theory, it is hypothesized that short selling deregulation provides a monitoring function on CSR performance of tourism companies, which are highly exposed to social and environmental problems. A multiple linear regression is conducted with a panel data of Chinese 21 listed tourism firms between 2010 and 2018. The descriptive statistics show that average CSR score of Chinese tourism companies is 25.52/100, which represents low CSR performance of tourism industry. The regression results illustrate that short selling constraints relaxation can improve CSR performance of tourism companies. The findings of this study indicate that financial policymakers shall consider further relaxation of short selling constraints, which can be beneficial to industry, such as tourism, that are sensitive to CSR practices and performance.