The Economic Consequences of the Loan Guarantees and Firm’s Performance: A Moderate Role of Corporate Social Responsibility

Ramos Meza C.S.; Bashir S.; Jain V.; Aziz S.; Raza Shah S.A.; Shabbir M.S.; Agustin D.W.I. · Global Business Review (2021) · DOI: 10.1177/09721509211039674

Resumen

This study examines the causal relationship between loan guarantee and firm’s performance through a moderate role of corporate social responsibility (CSR). This study used 350 non-financial firms of China for data analysis. This study used annual panel data set from non-financial firms starting from 2009 to 2019. The findings show that a positive significant association exists among the relationship between loan guarantee and firm’s performance. Moreover, a moderate role of Corporate Social Responsibility also strengthens the relationship between the loan guarantee and firm’s performance. Furthermore, the logit regression results show that the loan guarantee, financial performances and CSR are negatively affecting the long-term zero-debts through all combinations. Also, the financial performances and loan guarantees are negatively influencing the constraints of firms in China, which shows that the financial performances and loan guarantee improvement of the firms lead to removing the constraints of firms in China.