This study identifies unique corporate social responsibility (CSR) dimensions and develops a framework to analyze different levels of institutional dynamics in understanding CSR in China. Based on multiple case studies of 16 firms, the article examines the CSR philosophy and approach in China's emerging market. The findings suggest that Chinese CSR understanding is largely grounded in the context of ethical and discretionary actions. This focus is mainly attributed to the dominant role of ethical leadership, governmental dependency, and cultural traditions in (...) Chinese CSR. Moreover, the weakness or the absence of conducive social normative environment and positive peer pressure, and misalignment between CSR and organizational design further contribute to a lack of systemic and institutionalized approach to CSR in China. Our study implies that CSR is still evolving at a preliminary stage in China, and institutional infrastructure and cultural ethics are exerting abiding influence on CSR approach in the emerging economies. The article also suggests the implications for practice and policy making. (shrink)

Drawing on risk mitigation theory, this article examines whether the improvement of firms’ social performance reduces debt financing costs (CDFs) in China, the world’s largest emerging market. Employing both the ordinary least square (OLS) and the two-stage instrumental variable regression methods, we find that improved corporate social responsibility (CSR) reduces the CDF when firms’ CSR investment is lower than an optimal level; however, this relationship is reversed after the CSR investment exceeds the optimal level. Firms with extremely low or extremely (...) high CSR are subject to a higher CDF. The results also suggest that the optimal CSR level for small firms is higher than that for large firms. This study is the first to document a U-shaped relationship between CSR and CDF and also the first to investigate this relationship within an emerging market context. (shrink)

This study investigates antecedents of corporate social responsibility in multinational corporations' subsidiaries. Using stakeholder theory and institutional theory that identify internal and external pressures for legitimacy in MNCs' subsidiaries, we integrate international business and CSR literatures to create a model depicting CSR practices in MNCs' subsidiaries. We propose that MNCs' subsidiaries will be likely to adapt to local practices to legitimize themselves if they operate in host countries with different institutional environments and demanding stakeholders. We also predict that MNCs' subsidiaries (...) will be likely to adapt to local practices to avoid spillover effects if their parent companies suffer major legitimacy problems at home or abroad. However, we speculate that MNCs' subsidiaries will be less likely to adapt to local practices if they are strongly annexed to their parent companies and the benefit to gain internal legitimacy outweighs external legitimacy. This article contributes to the discourse on CSR across borders by exploring the antecedents of CSR practices in MNCs' subsidiaries at social and organizational levels, and integrating institutional and stakeholder views. We provide a number of propositions for future studies and explore implications for practitioners. (shrink)

Although establishing gender equality in board and managerial positions has recently become more important for organizations, companies with low levels of gender diversity seem to perceive an ethical dilemma regarding the ways, in which they attempt to attain it. One way that organizations try to move toward gender equality is through the use of their corporate websites to manage potential applicants’ impressions of their current levels of, and actions to improve, gender diversity. The dilemma is whether to truthfully communicate their (...) low level of gender diversity, conceal it, or exaggerate it. On the one hand, organizations that are truthful may find it difficult to achieve equality because women are less attracted to companies that lack diversity. On the other hand, organizations that are untruthful risk their moral legitimacy. The present work investigates gender diversity-related communication on the corporate websites of 99 major German companies. Based on theoretical work on minority attraction, we apply an organizational impression management taxonomy to guide our in-depth content analysis. With this approach, we hope to advance the understanding of how the issue of gender diversity is presented on corporate websites, which is useful for both organizational decision makers as well as diversity researchers. We found that although gender diversity-related communications on corporate websites contain both assertive and defensive organizational impression management tactics, as well as a third type of tactic we refer to as “acknowledgement,” assertive tactics were used more frequently. We argue the existence of a paradox whereby organizations use assertive impression management tactics to maintain pragmatic legitimacy but compromise their moral legitimacy by doing so. Furthermore, we argue that moral legitimacy can be maintained or restored through the sincere use of defensive impression management tactics and acknowledgement. (shrink)

We examine whether investors value the disclosure of first-time standalone corporate social responsibility reports, and whether market valuations differ between government-controlled and privately controlled firms. Using a matched sample of Chinese publicly listed firms, we find that CSR initiators have higher market valuations than matched CSR non-initiators, and CSR initiators controlled by the central and local governments have lower market valuations than CSR non-initiators and CSR initiators controlled by private shareholders. Additional analyses demonstrate that CSR initiators with high CSR reporting (...) quality and perceived credibility have higher market valuations than CSR initiators with low CSR reporting quality and medium or low perceived credibility of CSR reporting. We do not find convincing evidence that CSR mandate, litigation risk, and prior stock returns affect market reactions to CSR reporting. Overall, we find that the market values standalone CSR reports, and that CSR reporting quality and perceived credibility are important factors in market valuation. (shrink)

China is the world’s second largest economy and the largest emitter of carbon dioxide, yet we know little about environmental proactivity in the most populated country in the world. We address this gap through a survey of 161 Chinese companies with two respondents per firm (N = 322), where we seek to identify the antecedents and consequences of environmental proactivity. We identify two categorizations of environmental proactivity: Environmental operational improvements and environmental reporting. We find that ecological motivations and regulatory stakeholder (...) pressure are positively related to both types of environmental proactivity, and external stakeholder pressure is negatively related to environmental reporting. Furthermore, we find that (1) if a firm is environmentally proactive (as it relates to either measure) and they are ecologically motivated, there is a positive and significant cost advantage, and (2) if a firm makes use of environmental operational improvement and they are competitively motivated, there is a positive and significant reputation advantage. Implications for researchers, managers, and policy-makers in China are discussed. (shrink)

This research explores how consumers respond to Corporate Social Responsibility (CSR) in China with a multiproduct, comparative survey. Empirical results conclude that (1) Chinese consumers, who show a high level of awareness and trust of CSR, are more likely to transform a good CSR record into positive corporate evaluation, product association, and purchase intention; (2) Consumer responses to CSR vary across different product categories. Those firms selling experience products (vs. search and credence products) are more likely to gain consumers' positive (...) product associations and purchase support through CSR practices; and (3) The relationships between consumer demographics and their CSR responses are not linear, and those consumers with a middle level of age and income would respond to CSR more positively. Managerial implications are provided. (shrink)

The study contributes to building an understanding of the impact of political forces on the information environment of listed firms in a developing economy. Specifically, it investigates the tensions between politico-institutional factors and accounting regulation on the prolonged and incomplete implementation of the International Financial Reporting Standards in Bangladesh from 1998 to 2010. Two phases of interviews were conducted in 2010–2011 and IFRS-related enforcement documents from 1998 to 2010 were evaluated. The study contributes that IFRSs are being diffused to developing (...) countries like Bangladesh, but they invariably interact with local institutions, with variable outcomes. Coercive, normative and mimetic isomorphisms are low in Bangladesh. Notably, political forces have been undermining mimetic isomorphism because of the high level of government intervention and the high level of political lobbying. Political institutional pressures stand in the way of mimetic isomorphism and constitute negative forces that add further tension to accounting regulation in Bangladesh. Regarding the low level of normative isomorphism, there is evidence of a ‘blame culture’, with state institutions and professional accountancy institutions in the country blaming each other for the poor progress in IFRS implementation. Although the study focuses on Bangladesh, its results have implications for international policy makers, as well as the governments and regulators of other developing economies facing similar challenges in implementing IFRS. (shrink)

This study empirically examines whether firms’ environmental capital expenditures impact institutional investors’ investment decisions in the Chinese market. We particularly examine the impact of ownership type on the relationship of environmental capital expenditures and the behavior of different types of institutional investors by classifying institutional investors into two categories, short-term and long-term investors. In addition, this study further investigates whether environmental capital expenditures related to ownership type increase firm value. We find that long-term institutional investors tend to invest in state-owned (...) firms making environmental capital expenditures. Results also indicate that, with governmental backing and encouragement, the market value of SOEs making more environmental capital expenditures is likely to increase. However, no similar results are found for non-SOEs. (shrink)

Prior research suggests that ownership structure is associated to corporate social responsibility (CSR) in developed countries. This article examines whether and how ownership structure affects CSR in emerging markets using Chinese firms' social responsibility ranking. Our empirical evidences show that for non-state-owned firms, corporate ownership dispersion is positively associated to CSR. However, for state-owned firms, whose controlling shareholder is the state, this relation is reversed. We attribute the reversed relationship to political interferences and further test this hypothesis by demonstrating that (...) regional economic development is negatively related to CSR for state-owned firms due to decreased political interference in more developed areas. This study is the first to directly examine the relationship between the dispersion of corporate ownership and CSR in emerging markets, and our results depict that it is important to consider ownership type in assessing CSR in emerging market where state ownership is still prevalent such as China. The results also reveal that firm size, profitability, employee power, leverage, and growth opportunity affect CSR in China. (shrink)

This study examines the effects of corporate governance mechanisms on CSR performance in an emerging economy, China. Because of the need of gaining legitimacy in the new institutional context, Chinese firms have to adopt global CSR practices in order to remain competitive. Using the corporate governance framework, this study examines how board composition, ownership, and TMT composition influence corporate social performance. The propositions are tested using data gathered from 471 firms in China. By and large, empirical findings supported the hypothesized (...) relationships. (shrink)

In this study, I examine the hidden connection between corporate philanthropic giving and corporate environmental misconduct. Using survey data from Chinese family-owned firms, I provide strong and consistent evidence to show that corporate environmental misconduct is significantly positively associated with corporate philanthropic giving, suggesting that some Chinese family-owned firms act philanthropically to divert public attention from their environmentally unfriendly behavior. Moreover, the positive association between corporate environmental misconduct and corporate philanthropic giving is less pronounced for politically connected family-owned firms than (...) for their counterparts. The above results are robust to various sensitivity tests. My findings suggest that environmental misconduct dressing may be an additional motivation for corporate philanthropic giving and that different dimensions of corporate social responsibility may be inherently inconsistent in the given institutional setting. (shrink)

According to the predominant corporate sustainable development (CSD) framework, this exploratory paper verifies that CSD construct can be modeled by integrating the dimensions of social, economic, and environmental development. We first developed and validated measurement scales for these three dimensions based on a survey of 314 managers in mainland China. Then, using structural equation modelling, we confirmed that the proposed model is valid. Therefore, our findings may allow researchers to explore CSD further, and practitioners to develop their understanding of CSD (...) initiatives in organizations. (shrink)