The impact of corporate social responsibility of real estate firms performance in China

As China's economy grows, the real estate industry has become an important engine, but high indebtedness and financial insecurity have been highlighted. In 2021, the Chinese government launched the “ Three Red Lines ” policy, which restricts the ability of real estate companies to raise capital. This study examines the impact of corporate social responsibility (CSR) on financial performance and its role in mitigating the policy pressure using a sample of Chinese A-share listed real estate companies. Based on the CSR scores and financial data of real estate firms from 2010 to 2023, the study examines: (1) the positive impact of CSR on financial performance (ROE); (2) the impact of CSR on commercial credit; and (3) the buffering effect of CSR on financial stability (liquidity ratio) under the policy of “ three red lines ” . The results show that CSR has a significant positive effect on ROE and current ratio, but the relationship with trade credit is not significant, probably due to the lack of supplier confidence caused by the economic downturn. This study expands the moderating role of CSR on firm behavior under the policy environment and bridges the gap of related studies in China's real estate industry. The practical significance lies in providing support for firms to improve their financial status by enhancing CSR and providing new perspectives for policy makers to promote sustainable development. It is recommended that real estate firms increase CSR investment to enhance financial performance and stress resistance, and future research is encouraged to explore the mechanism of CSR's role in different contexts.