Abstract
Building on signaling theory, we carry out an event study method to compare the firms following GRI SR with firms reporting sustainability but not following the GRI guidelines. We identified a sample of 122 listed firms in China from CSMAR and Wind databases. The results show that GRI SR significantly increases firm profitability. Moreover, firms with local political ties and ISO 14000 maturity reap more benefits from GRI SR. The moderating effects of central governmental ties, ISO 9000, and OHSAS 18001 certification are not significant. Surprisingly, the performance impact of GRI SR is negatively correlated to the firm’s internationalization level.