2.1. Different CSR Dimensions and Firm Performance
The BM perspective indicates a new way of thinking of the environment for a firm, which deems a firm’s BM as a distinct business ecosystem where the focal firm and its complementary actors create value together [13
]. In recent years, facilitated by the rapid advancement of ICTs and the popularity of AI, it has become a prevalent phenomenon that focal firms create cross-border business models (CBMs) where their suppliers, customers, employees, goods, and services are located across separate geographic regions [17
]. Such a scenario reveals that firms with CBMs have to perform a greater variety of CSR activities in diverse countries, as the CSR regulations and policies may vary across nations due to differences in economic, institutional, market, and social systems. In this vein, from the BM perspective, it is imperative to evaluate firms’ CSR implementations through a broader, more comprehensive lens. As a result, we investigate the impact of different dimensions of CSR practice on firm performance herein.
Limited studies have investigated the impact of different CSR dimensions on firm performance in China, among which most of them have used the RANKINS database as it is one of the most reliable ones [20
]. Hence, we also referred to the instruction booklet of the RANKINS database to categorize CSR practices. The measure of CSR ratings includes four subdimensions: namely, (1) the macrocosm dimension (CSR-M), focusing on CSR issues related to an entity’s overall strategy, governance, and information disclosure to stakeholders, (2) the content dimension (CSR-C), involving the CSR concerns about an organization’s product and service offerings, protection of labors, human rights and environment, customer relationships, and its community participation and contribution, (3) the technique dimension (CSR-T), focusing on the CSR issues about corporate information transparency, as well as the standardization and integrity of annual reports, and (4) the industry dimension (CSR-I), demonstrating the industry-specific standards, such as raw materials, labor, and target markets. It should be noted that the rate of reporting completeness on the CSR-industry (CSR-I) dimension is relatively low due to a lot of missing data. Hence, we excluded the CSR-I scores herein.
The impact of CSR implementation on firm performance has long been discussed among scholars in decades while the results have remained controversial. Some scholars have found negative relationships between CSR and firm performance. Friedman (1970) argued that a firm only needs to meet minimal ethical requirements so as to maximize the interests of shareholders [20
]. Following this logic, any investment in CSR activities can be seen as a waste of firms’ resources, because this may transfer firm’s limited, valuable resources from economic value-added internal projects to noneconomic value-added CSR activities [23
]. Moreover, managers have incentives to overinvest in CSR activities due to various reasons, such as to build a positive reputation, get a higher salary, or distract attention from bad firm performance [25
]. Thus, this implies that CSR implementation increases firms’ cost and thereby is negatively related to firm performance.
Some scholars have found positive relationships between CSR and firm performance. This is because the implementation of CSR activities supports the interest of stakeholders, which raises the goodwill of a firm, thereby increasing its value, social legitimacy, and market potential, which thus improves its performance [28
]. In fact, internal stakeholders’ consensus or cooperation plays a critical role in the implementation of CSR practices [34
]. Several studies have demonstrated that having a shared vision can enhance both innovation effectiveness and firm performance [34
]. Choi and Yu [35
] indicated that perceived CSR has a significant impact on organizational performance. Additionally, some studies have demonstrated that no significant relationship exists between CSR implementation and firm performance [36
]. A review of relevant studies on CSR and firm performance in China is presented in Table 1
The aforementioned ongoing debates on the impact of CSR practice on firm performance indicate the need to more comprehensively investigate relevant topics in the new digital era. Most studies still mainly focus on demonstrating the effects of the aggregate/overall score of different CSR indices on outcomes [2
], but they seldom investigate how individual aspects of CSR implementation influence firm performance. Unlike the approaches adopted in the literature discussing CSR, Li [20
] posited the use of the three dimensions of CSR as independent indicators to represent corporate performance. Therefore, compared with employing the conventional concepts used for CSR assessment [7
], clarifying the effect of the three dimensions on corporate performance is more conducive to filling the current literature gap.
As indicated by Kolk et al. [42
] and Arora et al. [43
], in firms in nonwestern contexts such as China and India, CSR activities are primarily related to charity and philanthropy, which to some extent, are very costly, and the corresponding economic benefits are limited [42
]. Compared to customers who pay more attention to the environmental friendliness and social sustainability of products in western countries, customers in developing countries prefer cheaper products and pay less attention to CSR-related characteristics of products [2
]. CSR activities in these regions, which may raise market prices, will bring greater economic pressure to enterprises. Moreover, to ensure integrity and accountability, companies reaching a certain firm scale require an impartial and independent third party as an inspection agency when disclosing their CSR performance to the public, which is, as a matter of fact, very costly [44
]. Evidence also indicates that it consumes enormous resources of enterprises to maintain credibility, transparency, standardization, and readability of the CSR reports in China [20
]. In summary, previous research has predominantly focused their investigation on the effect of CSR on firm performance. Therefore, the present study further divided CSR into the CSR-M, CSR-C, and CSR-T dimensions and hypothesized that each of the dimensions negatively influences the performance of Chinese manufacturing firms. Therefore, this study developed Hypotheses 1–3 to verify how the CSR-M, CSR-C, and CSR-T dimensions relate to firm performance, respectively.
The CSR-M dimension is negatively related to firm performance.
The CSR-C dimension is negatively related to firm performance.
The CSR-T dimension is negatively related to firm performance.
2.2. The Role of Value Appropriation on CSR–Firm Performance
TCT can be used to explain the actual cost related to all the VA activities that focal firms need to cover, which results in miscellaneous transaction costs, including contracting costs, coordination costs, and search costs [45
]. Traditionally, this involves a variety of transaction costs for focal firms to adopt the VA in CBMs, especially in developing countries where the protection of intellectual property rights and asset specificity are weak and contract enforcement is imperfect [46
]. Nowadays, the rapid development of ICTs has allowed focal firms to synchronously share and process a massive amount of information and knowledge with a wide range of stakeholders spanning national borders within their CBMs. The phenomenon promotes the emergence and popularity of a new, modern type of VA that accelerates knowledge and information flow among participating actors but also requires far less resources than the traditional one [48
On the one hand, ICTs-driven VA enables an increasing number of organizations to be integrated into such contexts where VA may enable focal firms to build better, tighter relationships with their stakeholders and help a focal firm to fulfill the CSR expectations of its stakeholders while aiming for performance improvement [50
], which thereby reduces opportunistic behaviors among strategic partners in VA. On the other hand, organizations which are from different regions of the world are usually coupled with diverse CSR standards and regulations, which increase the complexity of such a virtual system. In this vein, CSR implementations consume far more resources than when managing implementations in single country, while the integration of a VA can reduce the risk of CSR implementations and improve the performance of enterprises by strengthening their links (such as ethical aspects) [52
]. In addition, VA can improve the evaluation and attitude of CSR and stakeholders, thus enhancing their credibility and improving their competitiveness [8
], while Jia [54
] believes that VA can improve the impact of CSR on firm performance. Moreover, the prevalent use of artificial intelligence (AI) and ICTs has allowed firms to more easily share information and messages together, and, in this way, reduce transaction cost. In summary, this study inferred that new value appropriation moderates the negative relationships of CSR-M, CSR-C, and CSR-T with firm performance. Accordingly, Hypotheses 4–6 were proposed as follows:
VA moderate the relationship between CSR-M and firm performance.
VA moderate the relationship between CSR-C and firm performance.
VA moderate the relationship between CSR-T and firm performance.