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Fostering Urban Inclusive Green Growth: Does Corporate Social Responsibility (CSR) Matter?

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Abstract

Urban inclusive green growth (UIGG) refers to the synergetic enhancement of the economy, the environment, and the society in a city. Achieving such enhancement requires addressing a series of problems in the development of urbanization, such as unemployment, lack of access to education, insufficient medical resources, inequity, and environmental pollution. As firms are critical to city development and urbanization, whether they practice corporate social responsibility (CSR) plays a crucial part in UIGG. In this study, we focus on Chinese cities as examples of UIGG and Chinese listed companies as CSR engagers, employing matched data on Chinese listed companies and cities to investigate how CSR affects UIGG. Specifically, the empirical results of a high-dimensional fixed effect model indicate that CSR significantly promotes UIGG. This finding remains valid after a set of robustness checks, including instrumental variable (IV) regression. CSR can promote UIGG by positively influencing enterprises’ economic performance, innovation, and employment. To promote firms’ substantive CSR actions, the government of Jiangsu Province, China, launched a pilot policy for CSR promotion by issuing an official guidance document, which can be considered a quasi-natural experiment to test the causality between CSR and UIGG. We find that the CSR pilot significantly promoted UIGG. The heterogeneity test results indicate that the influence of CSR on UIGG varies based on the audit company, the nature of the enterprise, and the structure of corporate leadership.

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Notes

  1. China’s reform and opening up was embarked upon at the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China in December 1978. China's domestic reform began with rural areas and the implementation of the household contract responsibility system. Then, it was gradually expanded to cities, and the autonomy of state-owned enterprises was enhanced. With regard to opening up, the government first implemented special policies for the foreign economic activities of southeastern coastal Guangdong and Fujian Provinces (Lu et al., 2019).

  2. For more data, please refer to the official website of NBSC at http://www.stats.gov.cn/english/ (last Accessed on 15/10/2022).

  3. Please refer to the following Chinese website: http://gxt.jiangsu.gov.cn/art/2017/3/30/art_6282_3709023.html (in Chinese, last Accessed on 15/10/2022).

  4. Please refer to the following Chinese website: http://www.xdkb.net/p1/nj/20220926/325981.html (in Chinese, last Accessed on 15/10/2022).

  5. Please refer to the following Chinese website: https://wap.miit.gov.cn/jgsj/qyj/gzdt/art/2022/art_83bfa90e68934b6b9860a7f3aedf51d0.html (in Chinese, last Accessed on 15/10/2022).

  6. Founded in 1996, Hexun.com is the first financial web portal in China and swiftly flourished in the area of financial and securities information services. Hexun.com is a third-party evaluation agency that is independent of all listed companies (Gong et al., 2021).

  7. For more detailed interpretations, please see http://stock.hexun.com/2013/gsshzr/index.html (in Chinese, last Accessed at 05/05/2022).

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Acknowledgements

The authors acknowledge financial support from the National Natural Science Foundation of China (72073010, 72321002), Science and Technology Program of Zhejiang Province of China (2022C35060), and the Joint Development Program of the Beijing Municipal Commission of Education. The authors are also very grateful to three anonymous reviewers and the guest editor Prof. Dr. Brett Anitra Gilbert for their insightful comments that helped us sufficiently improve the quality of this paper. The usual disclaimer applies.

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National Natural Science Foundation of China, 72073010, Yu Hao, 72321002, Zhaohua Wang.

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Wu, H., Luo, S., Li, S. et al. Fostering Urban Inclusive Green Growth: Does Corporate Social Responsibility (CSR) Matter?. J Bus Ethics 189, 677–698 (2024). https://doi.org/10.1007/s10551-023-05561-3

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