Corporate social responsibility and financial performance: The roles of government intervention and market competition

Wenbin Long, Sihai Li, Huiying Wu and Xianzhong Song

Corporate Social Responsibility and Environmental Management, 2020, vol. 27, issue 2, 525-541

Abstract: Incorporating instrumental and political views of corporate social responsibility (CSR), this study examines the relationship between CSR and corporate financial performance in China's unique institutional context, which is featured by the coexistence of a strong government and a transitional market economy. Our results show that (a) CSR positively affects financial performance, (b) state ownership weakens the relationship between CSR and financial performance, and (c) industry competition strengthens the relationship between CSR and financial performance for both state‐owned and non‐state‐owned firms. This study reveals that, although both an instrumental view and a political view of CSR are applicable in China, the motivation to create economic benefits for firms dominates, and market competition increases the strategic use of CSR.

Date: 2020
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https://doi.org/10.1002/csr.1817

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:27:y:2020:i:2:p:525-541

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