The roles of macro and micro institutions in corporate social responsibility (CSR): Evidence from listed firms in China

Abstract

Purpose

Firms’ corporate social responsibility (CSR) behaviour is embedded in the institutional context. Under this logic, the purpose of this paper is to investigate the institutional antecedents of CSR, especially how two sub-national institutions – regional institutional development and industry dynamism – and their interactions affect firms’ CSR.

Design/methodology/approach

The sample consists of 608 Chinese listed firms, with 2,694 observations made from 2009 to 2014. The data were collected from two sources. The CSR information was acquired from the CSR rating agency Rankins CSR Ratings, and the financial data from the China Stock Market and Accounting Research database. Panel ordinary least squares regression was used to test the hypotheses.

Findings

The empirical results indicate that firms located in advanced regional institutions and more dynamic industries are more likely to engage in CSR. Moreover, macro institution, termed as regional institutional development, positively moderates the relationship between micro institution in terms of industry dynamism and CSR.

Originality/value

Overlooking how the institutional environment influences CSR decisions limits understanding of firms’ CSR activities. This paper offers an institutional explanation of CSR and, in particular, investigates different levels of sub-national institutions and their interaction.

Citation

Pan, X., Chen, X. and Ning, L. (2018), "The roles of macro and micro institutions in corporate social responsibility (CSR): Evidence from listed firms in China", Management Decision, Vol. 56 No. 5, pp. 955-971. https://doi.org/10.1108/MD-05-2017-0530