| The Contingent Impacts of Political Competition on Corporate Social Responsibility: Evidence from Chinese Public Firms |
Received:September 28, 2017 Revised:September 28, 2017 |
Key Words: corporate social responsibility, institutions, political competition, state ownership, political ties, CEO employment risk |
| Author Name | Affiliation | | SHUPING LI* | Hong Kong Polytechnic University | | JANE LU | CEIBS |
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Abstract: |
| The study investigates whether and when political competition amongst China’s provincial officials may motivate firms under their jurisdictions to engage in corporate social responsibility (CSR) practices. We examine this issue with a sample of 2,503 Chinese public firms from 2009 to 2014. We set our study in the period before and after an exogenous national policy change that intensifies the political competition based on a combination of economic and social indicators. We show that increased political competition due to the policy change motivates firms to engage more in CSR by creating greater social value per share to a variety of stakeholders. Further, firms’ positive response in CSR to the increased political competition is greater for economically more developed provinces and firms with state ownership, while weaker for firms whose CEOs have political ties or higher employment risk. Our study contributes to the CSR literature by revealing the multi-level contingencies for a country’s political institution to affect firm CSR. |
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