Economic policy uncertainty and imitation behaviors of corporate social responsibility practices: Evidence from China

Xingnan Xue and Nan Hu

International Review of Financial Analysis, 2023, vol. 89, issue C

Abstract: In this paper, we examine whether firms facing higher economic policy uncertainty (EPU) are more likely to show similar corporate social responsibility (CSR) practices compared with their peer firms. Drawing upon institutional theory, in response to uncertainty under complex circumstances, managers tend to imitate peer firms' strategic actions to acquire legitimacy. Consistent with our theoretical expectations, we find that EPU increases the likelihood that a focal firm will show CSR practices similar to its peer firms. Such a likelihood is amplified for firms that (1) bear more negative media coverage, (2) have higher industry competition intensity, (3) belong to heavy-polluting industries, and (4) for the first-time disclosures. Our results hold when we employ a series of endogeneity tests and robustness checks.

Keywords: Economic policy uncertainty; Corporate social responsibility; Document similarity; Institutional theory (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:89:y:2023:i:c:s1057521923002697

DOI: 10.1016/j.irfa.2023.102753

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