On June 25, 2024, Faculty of Finance at City University of Macau organized the twenty-first Finance Salon (2023-2024) at the Taipa campus. The salon was delivered by Associate Professor Weiqiang Tan from The Education University of Hong Kong. His research paper titled "Navigating Labor Costs: Minimum Wage Policies and Corporate Social Responsibility Performance". The concept of minimum wage policies is rooted in the ethical principle of ensuring a basic standard of living and fair compensation for workers, but its implementation is controversial. This study examines how firms adjust their resource base in response to labor costs and whether such adjustments affect corporate social responsibility (CSR) performance. Using a sample of Chinese listed companies from 2010 to 2019, it finds that minimum wage policies are related to CSR performance. There is a significant negative correlation between them. Channel tests suggest that the minimum wage policy considerably increases labor costs for firms, leading to a reduction in CSR performance by decreasing the level of CSR investments. The research further identifies that the adverse effect of minimum wage policies on CSR performance is moderated by factors such as a firm’s product-market power, economic development within the city, technological orientation, and the risk of losing skilled labor. Additional analyses reveal a strategic shift in CSR activities in response to rising labor costs. Specifically, tactical CSR actions (i.e., donations) decline, whereas the impact on strategic CSR initiatives (i.e., sustainable related investments) remains insignificant. In summary, the findings offer insights into how the adoption of higher minimum wage policies may engender ethical conflicts among various societal objectives.
Associate Professor Tan, currently holds the position of associate professor in Department of Social Sciences and Policy Studies and the Programme Leader of Master of Arts in Personal Finance Education at The Education University of Hong Kong. His research interests include family finance, corporate finance, and financial education. He has published articles in journals such as the Journal of Financial Economics, Management Science, and the Journal of Corporate Finance.
During this academic seminar, Associate Professor Tan engaged in friendly exchanges with Faculty of Finance, broadening the academic horizons of us. The Finance Salon organized by Faculty of Finance at City University of Macau serves as a platform for exchanging academic ideas and fostering academic awareness. With finance as the main focus, we invite senior scholars/experts from academia and the financial industry to engage in research discussions on cutting-edge topics and share industry development trends, aiming to provide a fresh academic experience and thinking model for CityU students and members of the faculty. Through activities like the Finance Salon, we hope to offer graduate students a better academic platform, encouraging further exploration and research on academic issues.