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Article

Sub-National Institutional Contingencies and Corporate Social Responsibility Performance: Evidence from China

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School of Management, Xi’an Jiaotong University, Xi’an 710049, China
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Division of Computational Mathematics and Engineering, Institute for Computational Science, Ton Duc Thang University, Ho Chi Minh City 700000, Vietnam
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Faculty of Finance and Banking, Ton Duc Thang University, Ho Chi Minh City 700000, Vietnam
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Institute of Business & Management, University of Engineering & Technology, Lahore 54000, Pakistan
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Department of Management Sciences, Bahria University Lahore Campus, Lahore 54000, Pakistan
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(19), 5478; https://doi.org/10.3390/su11195478
Received: 24 July 2019 / Revised: 6 September 2019 / Accepted: 24 September 2019 / Published: 2 October 2019
This study investigates the relationship between sub-national institutional contingencies and corporate social responsibility performance (CSRP). Sub-national institutional contingencies (SNICs) play a moderating role in the link between CSRP and corporate financial performance (CFP). Using data from all A-share Chinese companies listed on the Shenzhen and Shanghai exchanges for the period 2010 to 2015, ordinary least square (OLS) regression was used as a baseline methodology to draw inferences from the data. The study uses propensity score matching (PSM) to confirm the robustness and to tackle the possible issue of endogeneity. We find reliable evidence that SNICs have a positive and significant effect on CSRP. This positive relationship is more pronounced in cross-listed companies as compared to state-owned enterprises (SOEs) and in companies located in the more developed region. Moreover, SNICs moderate the positive relationship between CSRP and CFP. The relationship is stronger in firms that are non-SOEs, are non-cross-listed, and are from less-developed regions as compared to their counterparts. The findings provide implications for regulators and individual companies. Investment in corporate social responsibility (CSR) helps companies to achieve their primary objective (i.e., financial performance). With respect to practical implications, the study indicates that policymakers, executives, and managers should refrain from “one size fits all” CSR policies. Instead, they need to simultaneously evaluate the effects of regional development, cross-listing, and ownership characteristics. Considering weak social performance by firms that are from less developed regions, are non-cross-listed, and that are non-SOEs, policymakers and the government should improve information transparency and the regulatory framework, and provide these firms with incentives. This study also provides insights for other emerging economies, especially those going through extraordinary government interventions. View Full-Text
Keywords: subnational institutional contingencies (SNICs); corporate social responsibility performance; corporate financial performance; institutional theory; China subnational institutional contingencies (SNICs); corporate social responsibility performance; corporate financial performance; institutional theory; China
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MDPI and ACS Style

Ali, S.; Zhang, J.; Usman, M.; Khan, F.U.; Ikram, A.; Anwar, B. Sub-National Institutional Contingencies and Corporate Social Responsibility Performance: Evidence from China. Sustainability 2019, 11, 5478. https://doi.org/10.3390/su11195478

AMA Style

Ali S, Zhang J, Usman M, Khan FU, Ikram A, Anwar B. Sub-National Institutional Contingencies and Corporate Social Responsibility Performance: Evidence from China. Sustainability. 2019; 11(19):5478. https://doi.org/10.3390/su11195478

Chicago/Turabian Style

Ali, Shahid, Junrui Zhang, Muhammad Usman, Farman U. Khan, Amir Ikram, and Bilal Anwar. 2019. "Sub-National Institutional Contingencies and Corporate Social Responsibility Performance: Evidence from China" Sustainability 11, no. 19: 5478. https://doi.org/10.3390/su11195478

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