Are Politically Endorsed Firms More Socially Responsible? Selective Engagement in Corporate Social Responsibility

Xiaowei Rose Luo () and Danqing Wang ()
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Xiaowei Rose Luo: INSEAD, Boulevard De Constance
Danqing Wang: The Hong Kong University of Science and Technology

Journal of Business Ethics, 2021, vol. 170, issue 3, No 7, 535-555

Abstract: Abstract The state plays a major role in corporate social responsibility (CSR) in emerging and transitional economies and often influences firms through political connection, and hence knowing how firms respond to the state’s CSR initiatives can inform policy making and has important implication on the sustainability of society and environment. However, existent studies show conflicting results on politically connected firms’ CSR participation. We examine the relationship between political endorsement and firms’ engagement in different types of CSR simultaneously. Using a representative sample of more than 1,000 private firms in the early 2000s, we find that politically endorsed firms engage more in philanthropic donation, but less in environmental practices, which impose higher costs and constraints than philanthropy. This is consistent with our explanation that they attempt to maintain legitimacy and discretion through selective engagement in CSR. Our study contributes to research on CSR in transitional economies by reconciling conflicting findings about the CSR engagement of politically connected firms, provides a new lens to illuminate firms’ strategic response in CSR, and has important policy implications.

Keywords: Corporate social responsibility; Political endorsement; Transitional economy; China (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (14)

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DOI: 10.1007/s10551-019-04367-6

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