Investing with Purpose: The Role of CSR in Enhancing Chinese Firms’ Performance in Japan

Xu Chen, Xuyang Dong (dxy369360@zjxu.edu.cn) and Chao Ma (machao_paper@126.com)
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Xu Chen: Xi’an Shiyou University
Xuyang Dong: Jiaxing University
Chao Ma: Ningbo University

Journal of the Knowledge Economy, 2024, vol. 15, issue 4, No 170, 20135-20171

Abstract: Abstract This research paper delves into the intricate dynamics of Chinese firms’ foreign direct investment (FDI) in Japan, shedding light on the “China model” of foreign investment. While previous studies have extensively explored Chinese FDI in resource-rich sectors, this paper focuses on the unique challenges and opportunities in a developed country like Japan, which shares similar technological capabilities with China. In particular, we investigate the role of corporate social responsibility (CSR) in mediating the efficiency of Chinese companies’ investments in Japan. As China’s economy continues to grow globally, understanding the effectiveness of its FDI activities has become increasingly important. This study employs a comprehensive approach, drawing insights from various academic perspectives, including digital finance, product market competition, education systems, energy intensity, logistical capability, and green credit policies, to provide a holistic view of Chinese FDI in Japan. Our findings emphasize the pivotal role of CSR in enhancing investment efficiency and mitigating challenges faced by Chinese firms in Japan. We highlight how CSR positively influences organizational trust, credibility, and risk management, ultimately improving investment effectiveness. Additionally, resource-based theory studies reveal the connection between CSR, technological innovation, and corporate growth, further enhancing investment efficiency. This research, grounded in stakeholder and information asymmetry theories, utilizes robust statistical methods and a rich dataset to establish and validate hypotheses. The results underscore the significance of CSR as a mediating factor and its positive impact on Chinese companies’ FDI efficiency in Japan. This study aligns with the principles of the knowledge economy and provides practical insights for policymakers in China and Japan. Both nations can foster a conducive environment for sustainable and mutually beneficial international collaborations in the global marketplace by promoting CSR practices and recognizing their influence on investment efficiency.

Keywords: Corporate social responsibility (CSR); Foreign direct investment (FDI) efficiency; Chinese companies; Richardson’s investment expectation mode; Descriptive statistics; Socially responsible practices (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-024-01875-3

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