Business Group-Affiliation and Corporate Social Responsibility: Evidence from Listed Companies in China

Xin Huang, Xianling Jiang, Wei Liu and Qian Chen
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Xin Huang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Xianling Jiang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Wei Liu: Department of Finance, Business College of Beijing Union University, Beijing 100025, China
Qian Chen: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China

Sustainability, 2021, vol. 13, issue 4, 1-21

Abstract: Business groups have played a vital role in the development of emerging markets. However, we share very limited understanding in the role of business group that act on affiliated firms’ CSR performance. Using manually sorted data on A-share listed companies and business groups in China from 2010–2017, we examine whether a company’s business group-affiliation affects its corporate social responsibility (CSR) performance and the mediating mechanisms of this association. Our empirical models show that group companies bear a higher level of social responsibility compared to independent companies. This positive relationship between group-affiliation and social responsibility relies on resource allocation through internal capital markets, rent-seeking initiatives, and consideration of corporate reputation. Moreover, group affiliation benefits the firm’s CSR performance in employee’s responsibilities, consumers’ responsibilities and environmental responsibilities, while significantly lower the shareholders’ responsibilities. Our empirical valuation of group companies’ CSR levels can serve as a benchmark for emerging market companies implementing social responsibility policies.

Keywords: business groups; CSR; internal capital market; rent-seeking; corporate reputation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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