Element Matching and Configuration Path of Corporate Social Responsibility Performance

Round 1

Reviewer 1 Report

I really like the idea of this paper and the theoretical framework.  I also have some suggestions for improvements.

1)  The paper requires extensive editing of English language and style.  The writing was often very hard to follow, and it should be as easy as possible so the readers are engaged with the ideas.

2) You should cite sources a little more.  (a) If you really want to draw on seven different theories for your seven different hypotheses, which I think is impressive, then you need to cite the original authors and also current authors who use the theory.  For example, you mention contestability theory in the context of industry competition, but you don't cite anyone for it when you do.  You might cite Baumol et al. (1982) and Brock (1983) for the original authors.  Jansen and Heidler (2012) wrote the only previous article in Sustainability that I could find that references it, so you should probably mention them too, and then find something from 2020 or later that also uses it and supports your argument.  (b) You should also cite some of the more widely known work on CSR.  For example, Waddock and Graves (1997) found that CSR and  financial performance affect each other -- this is the earliest paper to do this with good data that I know of.  More recently, Rothenberg et al. (2017) found that internal factors influence CSR; you should cite this both for internal factors and as one of the previous works to look at the drivers of CSR on which you build.  

3) I think that there have been more studies of the factors that lead to CSR than you suggest.  This does not weaken your contribution, but you should tone down the language (lines 40-41) about how few studies have looked at this relationship.  The value of your study is that you look at the drivers from many perspectives and integrate them.

4)  Table 1 is unclear where the outcome variables stop and the Causal variables begin.  I advise you to put an extra lie break into the table, or a line, or something.  I also do not understand why some of the causal variables seem to have been left out.

5) The analysis, results, and conclusions sections need revision.  I'm pretty good with math and very familiar with these concepts, and I really don't think I understand what you did here.  But it looks interesting and I would like to see these sections developed to the point where I can understand how you got from theory to the conclusions.  Specifically, how did the analysis lead to the development of these configurations?  If the reader can't understand this, the paper will fail.

I hope these comments help!

 

 

Works Cited

Baumol, W.J. Panzar, J.C., & Willig, R.D. (1982). Contestable Markets and the Theory of Industry Structure

Brock, W. (1983). "Contestable Markets and the Theory of Industry Structure: A Review Article". The Journal of Political Economy, v. 91, no. 6, pp. 1055–1066.

Jansen, D., & Heidler, R. (2012). Shareholding and Cooperation among Local Utilities: Driving Factors and Effects. In Sustainability Innovations in the Electricity Sector(pp. 57-81). Physica-Verlag HD.

Rothenberg, S., Hull, C. E., & Tang, Z. (2017). The impact of human resource management on corporate social performance strengths and concerns. Business & Society, 56(3), 391-418.

Waddock, S. A., & Graves, S. B. (1997). The corporate social performance–financial performance link. Strategic management journal, 18(4), 303-319.

Author Response

Response to Reviewer 1 Comments

Thank you very much for your review and valuable suggestions, which is really worth thinking deeply. In response to your suggestion, I have carefully revised and supplemented the paper. The following is my point-by-point explanation.

 

Point 1: The paper requires extensive editing of English language and style.  The writing was often very hard to follow, and it should be as easy as possible so the readers are engaged with the ideas.

 

Response 1: The language and style of the paper are revised in two parts: first, we condense the fsQCA method and its practical explanation language, so that readers can better understand the theoretical application; second, we analyse the research conclusions and management implications in more detail description to make it easier to understand.

In addition, the revised paper is polished by professional institutions to make its language and logic more in line with reading habits and make it easier for readers to engage with the ideas.

 

Point 2: You should cite sources a little more.  (a) If you really want to draw on seven different theories for your seven different hypotheses, which I think is impressive, then you need to cite the original authors and also current authors who use the theory.   (b) You should also cite some of the more widely known work on CSR. 

 

Response 2: The theoretical interpretation of this paper is weak, so we strengthen the description of the theory and increase the literature citations, mainly focusing on “ 2.2. Theoretical Framework” and “6. Discussion”. A total of 21 new literature citations have been added, which are marked in red in the paper.

Literature citations on relevant theoretical explanations and applications：

34. Brock, W. A. Contestable Markets and the Theory of Industry Structure: A Review Article. J Polit Econ 1983, 91, 1055-1066.
35. Waddock, S. A.; Graves, S. B. The Corporate Social Performance–Financial Performance Link. Strategic Manage J 1997, 18, 303-319.
36. Burke, L.; Logsdon, J. M. How Corporate Social Responsibility Pays Off. Long range plann 1996, 29(4), 495-502.

……

Literature citations on social responsibility research:

58. Woodside, A. G. Moving Beyond Multiple Regression Analysis to Algorithms: Calling for Adoption of a Paradigm Shift from Symmetric to Asymmetric Thinking in Data Analysis and Crafting Theory. J Bus Res 2013, 66, 463-472.
59. Burke, L.; Logsdon, J. M. How Corporate Social Responsibility Pays Off. Long range plann 1996, 29(4), 495-502.
60. Vogel, R. Parallel, Transfer or Collaboration Strategy of Relating Theory to Practice? A Case Study of Public Management Debate in Germany. Public Admin 2010, 88, 680-705.

……

 

Point 3: I think that there have been more studies of the factors that lead to CSR than you suggest.  This does not weaken your contribution, but you should tone down the language (lines 40-41) about how few studies have looked at this relationship.  The value of your study is that you look at the drivers from many perspectives and integrate them.

 

Response 3: According to expert' opinions, we rewrote and deleted the relevant sentences about "little previous research" in the paper. In addition, in "6.2. Research Innovations", we emphasize that the value of research lies in the integrated analysis of the antecedent combination of QCA performance from multiple perspectives.

 

Point 4: Table 1 is unclear where the outcome variables stop and the Causal variables begin.  I advise you to put an extra lie break into the table, or a line, or something.  I also do not understand why some of the causal variables seem to have been left out.

 

Response 4: We restructured Table 1 to make a clear distinction between outcome variable and causal variables, and added an explanation for the cause variable of " marketization". The revised Table 1 is as follows:

Table 1. Variable Definition and Measurement.

Variable Type	Constructs	Variable Definitions	Measurement Methods
Outcome variable	Corporate Social Responsibility (CSR)	High CSR performance	CSR scores released by Hexun.com
Causal variable	Return on Assets (ROA)	Financial performance	ROA=Net profit/Total assets
	Redundant Resources (RR)	Redundant resources	RR=Current assets/Current liabilities
	Political (POL)	Executive political background	Assign a value of 3, 2, 1, or 0 per the strength of the political connection
	Chinese provinces' marketization index (MI)	Marketization	The marketization index of the Chinese provinces compiled by Wang Xiaolu
	Herfindahl-Hirschman Index (HHI)	Industry competition	HHI=∑[(Xi/X)2], Xi: main business income of a single company; X: total main business income of the whole industry
	Subsidy (SUB)	Government subsidy	SUB=Financial subsidy/Operating income
	Ownership (OWN)	Ownership nature	State-owned enterprises are assigned 1, otherwise 0

 

Point 4: The analysis, results, and conclusions sections need revision. I'm pretty good with math and very familiar with these concepts, and I really don't think I understand what you did here. But it looks interesting and I would like to see these sections developed to the point where I can understand how you got from theory to the conclusions. Specifically, how did the analysis lead to the development of these configurations? 

 

Response 4: We reinterpret the analysis, results and conclusions of the paper in more detail. The specific analysis is as follows:

For analysis: We added the description of fsQCA method, and explained the basis for the emergence and determination of configurations.

In the specific practice of the fsQCA method, it is necessary to build a truth table and analyze the adequacy configuration for the conditional combinatorial analysis. As per the affiliated point, the consistency threshold is set to 0.7, and the frequency threshold is set to 10, owing to the large number of cases in this study. Afterward, complex solutions, intermediate solutions, and simple solutions are obtained through fsQCA calculation. Based on Frambach’s reporting method, the condition that occurs simultaneously in intermediate solutions and simple solutions is determined as the core condition that exerts a crucial impact on the outcome. Notably, the condition that only exists in the intermediate solution but not in the simple solutions is determined as the edge condition. The path of the seven causal variables forming the configuration leading to high CSR performance is shown in Table 5. The solution coverage is 0.82, indicating that the empirical analysis results in this study can eventually cover 82% of the cases. In fsQCA, it can be judged whether there is a sufficient relationship between variables according to consistency. Consistency refers to the consistency degree of the configuration belonging to the same result. When the consistency of a configuration is greater than the empirical critical value of 0.80, it can be said that the configuration is a sufficient condition for the result. In general terms, consistency is similar to significance in correlation analysis. The set relationship can be further analyzed only by satisfying it. After the operation, a total of six configurations are formed. It can be seen from the table 5. that the consistency of all configurations is greater than 0.8, indicating that these configurations have a good subset relationship with high CSR performance, that is, the causal variables have a good explanatory power for the outcome variable. According to the simple consistency logic, those with the same core conditions in the complex solution are combined accordingly to obtain four types. The obtained four types are as follows: market developed type (high performance, high marketization, and high competition); political link type (high political connections, high performance, and high redundancy); financial performance type (high performance, high redundancy, non-state-owned and weak political connections) and state-owned enterprise subsidy type (state-owned, high performance, high redundancy, high com-petition, and high subsidy).

Table 5. Adequacy Configuration Analysis.

		High CSR Performance
Variable	Configuration 1		Configuration 2	Configuration 3	Configuration 4	Configuration 5	Configuration 6
ROE	●		●	●	●	●	●
RR			●	●	●	●	●
SUB				U	●
MI	●					●	●
HHI	U		U		U	U	U
POL	U		●	U			U
OWN	●		U	U	●	U
Consistency	0.85		0.84	0.84	0.85	0.80	0.81
Coverage	0.06		0.07	0.10	0.04	0.16	0.19
Solution Consistency		0.37
Solution Coverage		0.82

Note: ●and● indicate that the variable appears, U andU indicates that there is no; ●and Urepresents core conditions, ● andUindicates edge conditions, blank indicates that whether the variable appears has no effect on the outcome, the same below.

For results, we added the description of the antecedent combination and strengthened the dialogue with the previous theoretical analysis. For example, in the explanation of “5.4. political link type”, we not only analyzed the reasons why executives' political background will bring high CSR performance, but also pointed out the hidden harm, and proposed that enterprises should not excessively pursue political connection. Excessive political ties also might produce strong altruistic motives to pursue personal political connections and social prestige. Although it produces high CSR performance, it may be more manifested in the protection of public welfare such as environmental construction, which damages the interests of internal stakeholders and ultimately harms the sustainable development of enterprises.

For conclusions and discussion, we added the analysis of the reasons for the overall low CSR performance of Chinese companies to make the paper more complete. There are two specific reasons. On the one hand, China has not yet formed a mature market competition environment and a transparent policy environment, which cannot guarantee the effectiveness of CSR investment. Therefore, enterprises are more willing to invest resources in market competition and ignore non-market environment. On the other hand, due to the particularity of the socialist market economy, CSR activities are usually related to the government, with a certain coercive and political nature, resulting in the low compatibility of corporate mission and CSR measures. The CSR-oriented strategic behavior does not bring the improvement of profits (especially short-term profits), damages the interests of stake-holders, and ultimately leads to the reduction of CSR intention.

Author Response File: Author Response.pdf

Reviewer 2 Report

The manuscript is well-written, covering the exploration of factors that promote high corporate social responsibility (CSR) performance. The factors include market development, political link, financial performance, and state-owned enterprises’ subsidy types. The discussion concerns inter-disciplinary sciences within the pillars of economics, business, and management.

The authors highlight managerial implications after coming up with the results that the external and internal factors and organizational characteristics together are dominant to promote high CSR performance.

In the section, the authors suggest that enterprises must prioritize financial status and development capabilities and put the political background of managers as a second thought. The study shows that abundant redundant resources are more critical for social activities, even if the enterprises do not have political connections with the government. For the second implication, the manuscript suggests the government takes a more active marketization movement. High marketization helps to promote enterprises’ social responsibility awareness and performance.

The manuscript uses fuzzy-set Qualitative Comparative Analysis (fsQCA), which is more common for marketing studies but becomes a rare method to examine sustainability issues empirically. The authors observe whether several causal variables, including industry competition, financial performance, redundant resources, government subsidy, ownership nature, and executive political background, contribute to the outcome variable, that is, corporate social responsibility performance. Data collection is quite large; 2244 pieces were obtained from 748 companies.

The manuscript explains how to do data calibration as part of the strict stages for conducting fsQCA analysis. It also points out steps to ensure calibration objectivity and overcome subjective bias. The manuscript also contains a robustness test to address criticism of the fsQCA study.

It is unfortunate that the manuscript does not offer a profound theoretical analysis that explains new phenomena in CSR improvement activities in China. 

Issues on factors crucial to and how to improve CSR performances have become a center of analysis in sustainability studies since the 1980s (for example, Engel, 1979; Jones, 1980; Mintzberg, 1983). Interestingly, it continues up to recent scholars.

However, this current manuscript does not offer new concepts about how the enterprises can implement strategies to transform themselves from industrial civilization into an eco-civilization. Instead, the manuscript focuses on proving the use of fsQCA to determine factors that promote voluntary services at the enterprises level, not on the pro and cons of the institutionalization process. With abundant studies have been done on the factors that promote CSR activities, I think it is more fascinating if the authors employ fsQCA to examine behavioral and psychological perspectives of management towards the promoting aspects. Doing so would expose when and in what ways CSR activities done by the enterprises would jointly serve economic and social interests and realize eco-civilization at the enterprise level. In 1979, Engel stated that the board of directors holds a proper role and responsibility to carry out effective social impact-considered strategies and concurrently achieve financial performances. For international readers, in positive ways, it is also fruitful to have China based-studies that explore managers’ behavioral perspectives toward several important constituencies that determine a higher level of CSR, such as employee welfare, consumer protection, environmental protection and community relations, shareholder rights, compliance with laws, finances, purchasing and marketing, management efficiency, and planning and research. Doing so will highlight how the business enterprises currently respond to and grasp the efforts promoted by the government to improve the CSR activities in China regions.

I suggest the authors deepen the section on management implications. The manuscript states that ‘the enterprises should enhance social responsibility awareness and actively participate in the implementation of social responsibility strategies’. What are the best strategies for incorporating social responsibility agenda for Chinese enterprises with the particular China institutional system? For example, with the specific subsidies for state-owned enterprises that have occurred for a long time, why do the authors mention that the CSR practices in China are still at a low implementation level? What are the feasible strategies that the authors may suggest to improve the implementation level, despite the current institutional system in China? An article written by Lee & Logsdon (1996) is worth reading to help determine the strategies.

It is suggested to improve the theoretical contribution of the manuscript, by comparing the results of fsQCA analysis with the relevant theory in section 5 Discussion. Doing so could help the authors to explore new competitive strategies for incorporating sustainability issues at the enterprises level.

 

Comments for author File: Comments.docx

Author Response

Response to Reviewer 2 Comments

Thank you very much for your review and valuable suggestions, which is really worth thinking deeply. In response to your suggestion, I have carefully revised and supplemented the paper. In addition, the revised paper is polished by professional institutions to make its language and logic more in line with reading habits and make it easier for readers to engage with the ideas. The following is my point-by-point explanation.

 

Point 1: I suggest the authors deepen the section on management implications. The manuscript states that ‘the enterprises should enhance social responsibility awareness and actively participate in the implementation of social responsibility strategies. What are the best strategies for incorporating social responsibility agenda for Chinese enterprises with the particular China institutional system?

 

Response 1: Based on expert opinions, we enrich the content of “Management Implications”. In addition, according to the results of fsQCA and specific management practices, we analysed the reasons for the low CSR performance of Chinese enterprises, and proposed management measures to improve CSR performance from the perspectives of enterprises and the government.

There are two reasons for the low CSR performance. On the one hand, China has not yet formed a mature market competition environment and a transparent policy environment, which cannot guarantee the effectiveness of CSR investment. On the other hand, due to the particularity of the socialist market economy, CSR activities are usually related to the government, with a certain coercive and political nature, resulting in the low compatibility of corporate mission and CSR measures.

Therefore, the improvement of CSR performance requires the joint efforts of the government and enterprises. Governments should take targeted measures to enhance the local comprehensive management ability and fair legal environment to improve the overall marketization degree and effectively enhance the motivation of enterprises to consciously fulfill social responsibilities from the perspective of the institutional environment. In order to improve CSR performance, the government can gradually cultivate CSR awareness and further develop public welfare habits through economic means such as policy subsidies and tax incentives. For enterprises, the most important thing is to correctly view the strategic significance of CSR and reasonably plan the strategic behaviour. Enterprises should improve the fit between enterprise mission and social responsibility measures, and make CSR an auxiliary strategy to enhance their competitive advantage.

 

Point 2: It is suggested to improve the theoretical contribution of the manuscript, by comparing the results of fsQCA analysis with the relevant theory in section 5 Discussion.

 

Response 2: Combined with the research content, we have supplemented and explained in detail in the "6. Discussion". Each type of explanation echoes the previous theoretical background to enhance the theoretical value of the article Mainly, we enrich the “6.1 Conclusions” and “6.2 Research Innovations”, and supplement the “6.3 Management Implications” combined with the fsQCA conclusions, relevant theories and management practices.

We strengthened the comparison and analysis with relevant theories in fsQCA analysis. For example, in "5.2. Political Link Type", we summarized the reasons why executives with political background will produce high CSR performance based on the upper echelons theory. On the one hand, the existing cognitive structure and value system of the management determines the explanatory power of relevant information, so the political background helps to strengthen the intention of enterprises to establish contact with the government. On the one hand, executives with political background are eager to gain social prestige and personal reputation by taking social responsibility, so companies usually show high CSR performance.

In addition, in "5.4. State-owned Enterprise Subsidy Type", in addition to analysing the internal logic that high subsidies can produce high CSR performance, we also analysed the potential hazards under this path according to the resource dependence theory. Factually, enterprises that receive high subsidies are highly dependent on the government. This encourages the enterprises to follow government requirements and weakens the management initiative. The enterprises cannot reasonably grasp the matching between CSR and operation while undertaking the CSR initiatives. The compatibility of corporate social responsibility activities with business operations is weak, and resource investment cannot bring profits, thereby reducing the enthusiasm and performance of state-owned enterprises for social responsibility.

 

Point 3: With the specific subsidies for state-owned enterprises that have occurred for a long time, why do the authors mention that the CSR practices in China are still at a low implementation level?

 

Response 3: In the "5.4 State-owned Enterprise Subsidy Type", while explaining this type, it also answers the reasons for the low CSR performance of state-owned enterprises, that is, the social responsibility of state-owned enterprises does not match their own business goals, and social responsibility investment cannot bring benefits. Therefore, CSR investment is unsustainable and CSR performance is inefficient.

Specifically, Chinese state-owned enterprises are generally involved in fields associated with the country’s economic lifeline and strategic resources. Most of these SOEs represent the basic national public welfare undertakings, with large capital investment and long revenue cycles, and even the operating income and profits also rely on government subsidies therefore, numerous financial subsidies are needed to sustain the development of these enterprises. The state-owned enterprise subsidy type leads to high CSR performance, which is the product of China’s special economic system. The difference from western countries is that state-owned enterprises have dual characteristics of economic and social owing to the mission of safeguarding public interests, and even bear part of the responsibility of the government. By assuming social responsibility, the SOEs can attain government subsidies and achieve sustainable development. However, government subsidies have a double effect. According to the resource dependence theory, enterprises that receive high subsidies are highly dependent on the government. This encourages the enterprises to follow government requirements and weakens the management initiative. The enterprises cannot reasonably grasp the matching between CSR and operation while undertaking the CSR initiatives. This results in the phenomenon of "high input—low output" that makes the social responsibility of high-subsidy state-owned enterprises still inefficient, although it has been higher than that of non-state-owned enterprises.

 

Point 4: What are the feasible strategies that the authors may suggest to improve the implementation level, despite the current institutional system in China?

 

Response 4: Since the focus of the research is to explore the antecedents that affect the high CSR performance, the analysis of the overall low CSR performance of Chinese enterprises has not been carried out in depth. It only makes a comprehensive analysis in “6.3 Management Implications”, and gives corresponding suggestions to improve the performance of CSR in combination with the research results.

The corporate social responsibility-oriented strategic behaviours do not bring the improvement of profits (especially short-term profits), damages the interests of stake-holders, and ultimately leads to the reduction of CSR intention. Therefore, enterprises should improve the fit between enterprise mission and social responsibility measures. In addition, enterprises must clarify financial status and development capabilities since they cannot blindly take social responsibility measures, as sufficient redundant resources and performance are always the basis for enterprises to undertake CSR.

The immature market environment and institutional environment also restrict the improvement of CSR performance. Enterprises cannot obtain resources in the non-market environment and cannot protect their own interests, which ultimately leads to the decline of CSR performance. Therefore, the government should integrate social resources, rationally use political or economic means, ensure social affairs, and promote the process of marketization. Furthermore, the government should be the guide of the market and enterprises, lead enterprises to form the awareness and habit of social responsibility and enhance the overall level of social responsibility.

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

Thank you for your attention to my comments!  I think the issues I had with understanding the math and the data analysis have been addressed, thank you.  There is still some room for improvement on a couple of other points.

1) The language still needs to be cleaned up -- there are still a lot of grammar problems through the paper.  To be clear, I'm talking about fixing individual sentences throughout the paper, not revising specific sections.

2) The extra cites added a lot, but still, if you're going to mention a theory, you should cite the seminal works in that theory.  Some more work on citations is needed.

3) The theoretical development is improved, but it could use further development, especially around the original works in each field and how they contribute to your project.

Good luck!

--Clyde

Author Response

Thanks again for your comments and suggestions! I have carefully revised the paper and professionally polished it to better match the language style and writing conventions. Here is my point-by-point explanation:

Point 1: The language still needs to be cleaned up -- there are still a lot of grammar problems throughout the paper.  To be clear, I'm talking about fixing individual sentences throughout the paper, not revising specific sections.

Response 1: My English writing ability is indeed lacking, so I found a professional editing agency to polish the paper in all aspects to improve language issues and grammatical standardization. I can provide the relevant polish document in the attachment.

 

Point 2: The extra cites added a lot, but still, if you're going to mention a theory, you should cite the seminal works in that theory.  Some more work on citations is needed.

Response 2：We have added references to the seminal works on the theory of seven causal variables to complete “2. Theoretical Background”. Added content and references are as follows:

• Financial Performance—Capital market theory

“The capital market theory holds that a sufficient capital guarantee serves as an integral material guarantee for enterprises to take long-term management measures and maintain sustainability. The ability to discover the value of corporate social responsibility depends on the capital market, business performance, and managerial decision-making.”

[10] Majumdar, S. K.; Chang, H. On the Determinants of Non-market Strategy: The Separations Mechanism and Cost Shifting in the Telecommunications Industry. Telecommun Policy 2010, 34, 711-725.

[14] Gallego, L.; Prado-Lorenzo, J. M.; Garcia-Sanchez, I. M. Corporate Social Responsibility, and Innovation: A Resource-based theory. Manage Decis 2011, 49, 1709-1727.

(2) Redundant Resources—Organization theory

“As per the organization theory viewpoint, organizational flexibility can improve efficiency, and redundancy can provide a solid financial guarantee for the enterprises to fulfil social responsibilities and enhance resource allocation. Singh thinks that when redundant resources are within the normal range, companies can take advantage of organizational redundancy to adjust their strategies and improve their risk-taking ability in an uncertain environment.”

[22] Singh, J. V. Performance, Slack, and Risk-Taking in Organizational Decision Making. Acad Manage J 1986, 29, 562-585.

(3) Government Subsidy—Resource dependence theory

“The resource dependence theory claims that the enterprise resources are limited and cannot meet all the development needs. Thus, enterprises continuously need to attain advantage resources from the external environment to achieve business sustainability, and the significance of these resources determines the degree of their dependence. The research of Pfeffer & Salancik also confirmed that the demand of the organization to obtain resources produces the dependence on the external environment, and the scarcity and importance of resources determine the strength and scope of the organization's dependence.”

[27] Tariq, S. Choice of Market Entry Mode is Contingent on Environment: Integrating the Resource Dependence and Contingency Theory Perspectives. Int J Sci Bus 2019, 3, 173-182.

[28] Pfeffer, J.; Leong, A. Resource Allocations in United Funds: Examination of Power and Dependence. Soc Forces 1977, 55, 775-790.

(4) Marketization—Efficient market hypothesis

“The efficient market hypothesis stipulates that external systems and culture limit the choice of enterprise behavior. Moreover, the market state directly affects the strategic direction of the enterprise, which has become one of the important theoretical foundations for the study of the capital market. Levine believes that markets are rational, efficient, and unpredictable, and that developed markets effectively promote risk improvement, information collection, and management monitoring, thus increasing the willingness of companies to disclose information.”

[31] Majumdar, S. K.; Chang, H. On the Determinants of Non-market Strategy: The Separations Mechanism and Cost Shifting in the Telecommunications Industry. Telecommun Policy 2010, 34, 711-725.

[32] Levine, R. Stock Markets, Growth, and Tax Policy. J Financ 1991, 46, 1445-1465.

(5) Industry Competitiveness— contestability theory

“Industry competition is a bridge connecting macro-economy and micro-enterprises, and its intensity will directly affect business activities. Baumol et al. put forward the contestability theory, which is used to describe the possibility of market entry, and further analyzed that potential competitive pressure will prompt enterprises to adopt efficient market behavior. According to the contestability theory, enterprises in a competitive market present a transparent state of financial and strategic information that is economically and promptly transferred to stakeholders.”

[36] Baumol, W. J.; Panzar, J. C.; Willig, R. D. Contestable Markets: An Uprising in The Theory of Industry Structure. Am Econ Rev 1983, 73, 491-496.

[37] Brock, W. A. Contestable Markets and the Theory of Industry Structure: A Review Article. J Polit Econ 1983, 91, 1055-1066.

(6) Executive Political Background—Upper echelons theory

“In the 1980s, Hambrick and Mason first proposed the upper echelons theory, pointing out that the strategic choice of an enterprise is a complex process, and the cognition or interpretation of management problems depends on the psychological structure of decision-makers, that is, the executives' experience affects their cognition that ultimately affects their decision-making.”

[42] Hambrick, D. C.; Mason, A. Upper Echelons: The Organization as A Reflection of Its Top Managers. Acad Manage Rev 1984, 9, 193-206.

[43] Gupta, A.; Fung, A.; Murphy, C. Out of Character: CEO Political Ideology, Peer Influence, and Adoption of CSR Executive Position by Fortune 500 Firms. Strategic Manage J 2021, 42, 529-557.

(7) Ownership Nature—Resource-based theory

“According to the resource-based theory, an enterprise's ability to govern resources directly impacts the selection and implementation of strategic activities. Wernerfelt proposed that attention to resources is the logical starting point for enterprises to make strategic choices, and emphasized that resource barriers based on heterogeneous resources, knowledge, and capabilities are the key to explaining the high profits of enterprises.”

[49] Wernerfelt, B. A Resource‐based View of the Firm. Strategic Manage J 1984, 5, 171-180.

[50] Faccio, M. Politically Connected Firms. Am Econ Rev 2006, 96, 369-386.

Point 3: The theoretical development is improved, but it could use further development, especially around the original works in each field and how they contribute to your project.

Response 3: We have added recent research under a combination of theory and themes to highlight the rationale for the selection of causal variables. In addition, we also supplemented the existing literature research in "5. Discussion" to further explain the conclusions of this study. Added content and references are as follows:

• Financial Performance—Capital market theory

“Kwon et al. confirmed that financial distress will affect enterprise evaluation and strategic effects, and a reasonable capital structure plays an active role in reducing operational risks and easing financing constraints.”

[13] Kwon, Y.; Han, S. H.; Lee, B. S. Financial Constraints and Negative Spillovers in Business Groups: Evidence from Korea. Pac-Basin Financ J 2016, 39, 84-100.

(2) Redundant Resources—Organization theory

“Troilo et al. found that executives rely on the stock of redundant resources to make decisions, and redundant companies are more inclined to take aggressive management activities, such as product innovation and market development.”

[26] Troilo, G.; Luca, L. M. D.; Atuahene‐Gima, K. More Innovation with Less? A Strategic Contingency View of Slack Resources, Information Search, and Radical Innovation. J Prod Innovat Manag 2014, 31, 259-277.

(3) Government Subsidy—Resource dependence theory

“Christensen & Murphy advocated that the central goal of CSR activities is to gain political support and preferential government treatment. Therefore, government subsidies determine the willingness and performance of CSR.”

[29] Christensen, J.; Murphy, R. The Social Irresponsibility of Corporate Tax Avoidance: Taking CSR to the Bottom Line. Development 2004, 47, 37-44.

(4) Marketization—Efficient market hypothesis

“Burks explored the correlation between information disclosure and the market environment and highlighted that the market development status directly affects corporate behavior. Corporate information disclosure is more transparent in regions with high marketization, and enterprises are willing to implement CSR strategies to shape their corporate image.”

[34] Burks, J. J.; Cuny, C.; Gerakos, J.; Granja, J. Competition and Voluntary Disclosure: Evidence from Deregulation in the Banking Industry. Rev Account Stud 2018,23, 1471-1511.

[35] Antonetti, P., Bowen, F., Manika, D.; Higgins, C. Hypocrisy in Corporate and Individual Social Responsibility: Causes, Consequences, and Implications. J Bus Res 2019, 114, 325-326.

(5) Industry Competitiveness— contestability theory

“Further, Shepherd also believed that market structure will directly affect corporate strategy, that is, industry competitiveness affects decision-making performance through corporate behavior. While investigating antecedents of CSR performance, Flammer reported that in highly competitive industries, enterprises tend to exhibit differently from competitors by actively undertaking social responsibility to acquire political resource benefits.”

[39] Shepherd, W. G. Contestability VS Competition. Am Econ Rev 1984, 74, 572-587.

[40] Flammer, C. Does Product Market Competition Foster Corporate Social Responsibility? Evidence from Trade Liberalization. Strategic Manage J 2015, 36, 1469-1485.

(6) Executive Political Background—Upper echelons theory

“Hillman et al. found that when enterprises face development obstacles (such as industry barriers), establishing government-enterprise connections through the political background of executives can enable enterprises to effectively communicate with the government and broaden the development space”

[44] Kim, B.; Moon, J. J.; Kim, E. Executive Migration Matters: The Transfer of CSR Profiles Across Organizations. Bus Soc 2022, 61, 155-190.

[45] Hillman, A. J.; Keim, G. D.; Schuler, D. Corporate Political Activity: A Review and Research Agenda. J Manag 2004, 30, 837-857.

(7) Ownership Nature—Resource-based theory

“Furthermore, the heterogeneity among enterprises determines the difference between competitive advantage and corporate mission, which is reflected in the determination of the strategies. As the most heterogeneous feature, ownership nature fundamentally decides the resource endowment, strategic management, and development potential. Huang et al. pointed out in the research on foreign investment that enterprise ownership affects the OFDI decision and location selection.”

[51] Shen, Z. D.; Hansson L. The Driving Forces for CSR reporting in China Supervisors. Environ Manag 2006, 22, 36-50.

[52] Huang, Y.; Xie, E.; Li, Y.; Reddy, K. S. Does State Ownership Facilitate Outward FDI of Chinese SOEs? Institutional Development, Market Competition, and the Logic of Interdependence Between Governments and SOEs. Int Bus Rev 2017, 26, 176-188.

……

“Bloom’s research shows that when the market environment is unstable, companies will be more cautious in investment decisions and more inclined to hold cash assets. Similarly, Im et al. also found that market uncertainty reduces CSR performance.”

[66] Bloom, N.; Bond, S.; Van Reenen, J. Uncertainty and Investment Dynamics. Rev Econ Stud 2007, 74, 391-415.

[67] Im, H. J.; Park, H.; Zhao, G. Uncertainty and The Value of Cash Holdings. Econ Lett 2017, 155, 43-48.

“The political motivation theory believes that the purpose of CSR is to obtain political resources, that is to say, CSR and political demands are in an interactive relationship.”

[69] Chen, Y.; Liu, M.; Su, J. Greasing the Wheels of Bank Lending: Evidence from Private Firms in China. J Bank Financ 2013, 37, 2533-2545.

“As Mishina concluded, stable financial performance increases stakeholders' expectations for the company's development, which makes them more willing to devote resources to CSR to create a competitive advantage.”

[70] Mishina, Y.; Block, E. S.; Mannor, M. J. The Path Dependence of Organizational Reputation: How Social Judgment Influences Assessments of Capability and Character. Strategic Manage J 2012, 33, 459-477.

……

Thanks again for your review. I hope this revision is satisfactory!

Author Response File: Author Response.pdf

Round 3

Reviewer 1 Report

Thank you for your careful attention to my reviews!  Having been on the other end of this process, I know how difficult it can be.  I hope that, now that the work is done, and impressively so, that you feel the article is stronger for having gone through this process.  I think so.

I have only one small proposed edit.  As I went through the article and looked at all your changes, I noticed that the two articles (#3 and #19) you changed had the exact same title.  I took the liberty of looking them up.  They are as follows:

Lee, M.; Kim, H. Exploring the organizational culture’s moderating role of effects of Corporate Social Responsibility (CSR) on firm performance: Focused on corporate contributions in Korea. Sustainability 2017, 9(10), 1883.

Tang, Z.; Hull, C.E.; Rothenberg, S. How corporate social responsibility engagement strategy moderates the CSR–financial performance relationship. Journal of Management Studies 2012, 49(7), 274-1303.

I recommend that you fix these, and take one last check through the rest of the references to make sure there are no other duplicate titles (I did not see any).  Other than that, I am not just satisfied but impressed.  Well done!

Author Response

Response to Reviewer 1 Comment

 

I am pleased to get your suggestions. Under your guidance, the article has indeed been revised more completely and logically. I am also sincerely grateful for your review during this time. Your recognition has inspired me and given me full confidence in the next scientific research.

Point: I recommend that you fix these, and take one last check through the rest of the references to make sure there are no other duplicate titles (I did not see any). 

Response: I am sorry for such a simple error; it should be confusion in the typesetting of the references. The author of reference #19 is correct, but the title does not correspond and I have corrected it. To avoid such mistakes, I have rechecked the format and content of all references. I assure you that the current reference is correct. In addition, I also checked the spelling of the text in the article。

19. Rothenberg, S.; Hull, C. E.; Tang, Z. T. The Impact of Human Resource Management on Corporate Social Performance Strengths and Concerns. Bus Soc 2017, 56, 391-418.

Finally, thank you again for your efforts!