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Does privatization matter for corporate social responsibility? Evidence from China

Farman Ullah Khan, Junrui Zhang, Nanyan Dong, Muhammad Usman (), Sajid Ullah and Shahid Ali
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Farman Ullah Khan: Xi’an Jiaotong University
Junrui Zhang: Xi’an Jiaotong University
Nanyan Dong: Xi’an Jiaotong University
Muhammad Usman: Nanjing Audit University
Sajid Ullah: Xi’an University of Technology
Shahid Ali: Xi’an Jiaotong University

Eurasian Business Review, 2021, vol. 11, issue 3, No 6, 497-515

Abstract: Abstract This paper examines the link between privatization of state ownership and corporate social responsibility performance. Using a sample of Chinese listed companies between 2010 and 2015, we find evidence that privatization is negatively associated with firms’ social performance but this negative relationship is weaker for firms that have politically connected board members. These results suggest that the firm’s likelihood to engage in social activities results primarily from political connections and from significant government control over the firm’s decisions, as such firms are subject to higher pressure than other firms are. Moreover, our findings have important implications for policymakers in understanding companies’ social behavior in an emerging market.

Keywords: Privatization; Board’s political connections; Corporate social responsibility (CSR); China (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s40821-020-00154-w

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