The impact of top-down amplification of economic growth targets on CSR performance-evidence from China

Houyin Long, Guansen Lai, Jiaoliang Jiang and Ruonan Liu

International Review of Financial Analysis, 2025, vol. 101, issue C

Abstract: This paper investigates the impact of top-down amplification of economic growth targets on corporate social responsibility (CSR) performance. We find a significant negative relationship between the amplification and CSR performance. We further explore the underlying mechanisms for such an effect and find that top-down amplification of economic growth targets aggravates firms' operating risk and increases their financial constraints, thereby leading to a decline in CSR performance. Further analysis shows that the effect is more pronounced among firms with less economically important, inefficient external and internal monitoring, in non-state-owned enterprises (non-SOEs), and those with lower facilitation payments. Additionally, we also find that firms with lower CSR performance are more affected by the top-down amplification of economic growth targets in terms of worse operating performance and lower total factor productivity. Overall, our findings provide new insights into the consequences of the top-down amplification of economic growth targets in emerging markets, thus expanding and complementing the existing literature.

Keywords: Top-down amplification; GDP targets; CSR performance; Total factor productivity (search for similar items in EconPapers)
JEL-codes: G18 G30 G32 H76 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:101:y:2025:i:c:s1057521925000821

DOI: 10.1016/j.irfa.2025.103995

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