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Article

Corporate Social Irresponsibility Punishments from Stakeholders—Evidence from China

by
Tianli Feng
*,
Fan Yang
,
Biao Tan
and
Jihong Wu
*
School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610056, China
*
Authors to whom correspondence should be addressed.
Sustainability 2022, 14(8), 4678; https://doi.org/10.3390/su14084678
Submission received: 10 March 2022 / Revised: 4 April 2022 / Accepted: 11 April 2022 / Published: 13 April 2022
(This article belongs to the Special Issue Bank Development and Ethics and Corporate Social Responsibility)
Review Reports Versions Notes

Abstract

:
Corporate social irresponsibility (CSIR) scandals are frequently reported in China and have a huge impact on the enterprise and society. Aiming to understand the underlying mechanisms between CSIR and enterprise outcomes, this study uses a sample of 2618 firms from the 2018 National Survey of Private Entrepreneurs Survey and examines the corporate social irresponsibility punishments from the perspective of stakeholders by introducing transaction costs. The results indicate that although the punishments for corporate irresponsible behaviors may not be strong enough to deter enterprises from irresponsibility in China, punishments from various stakeholders are increasing in terms of transaction costs. In addition, crisis management capacity may negatively moderate the relationship between CSIR and transaction costs, while regional economic development positively moderates it. This study adds to the extant research on CSIR consequences by combining stakeholders with transaction costs and provides new insights into transaction costs.

1. Introduction

Corporate social irresponsibility (CSIR) refers to corporate activities that negatively affect the long-term interests of a wide range of stakeholders [1]. It focuses on companies that underperform in terms of legal obligations, ethical commitment, and environmental and social issues. The processes of CSIR arise from premeditated and poorly judged decisions focused on obtaining some benefit, which, although sometimes legal, is always immoral [2]. Corporate social responsibility (CSR) refers to firms’ perceived duty to engage in initiatives that go beyond what is required by law in response to stakeholders’ demands [3]. CSIR and CSR are actually related but independent behaviors, both of which have their own internal mechanisms [1]. CSIR has a greater capacity to arouse the firm’s observers and is likely to have an opposite yet stronger and longer-lasting effect than CSR initiatives [4]. However, existing research has focused predominantly on CSR [5,6,7,8,9] theory and practice, CSIR, a universal phenomenon that jeopardizes the development of an organization, is much less explored.
Among these limited studies, the negative consequences of CSIR involve customer losses [10], decreased employee motivation [11], or damaged reputation [12], and ultimately threaten the development of the company in the form of loss of sales revenue, an increase of capital costs, and financial risk [4,7,13,14]. Scholars have mainly focused on the direct impact of CSIR on the financial performance of enterprises. Some studies have shown that CSIR damages the reputation of the company and leads to performance failure [13,15,16]. Some scholars suggest that CSIR is a cost-saving strategy to improve the company’s performance at the expense of reducing stakeholder value [17]. Abbott and Monsen [18] support that there is no special connection between CSIR activities and financial performance. These inconsistent conclusions encourage researchers to begin to consider CSIR and financial results under the condition of marketization [19], media coverage [20], or others. However, few studies have examined the underlying process mechanism leading to the final outcomes from transaction costs, especially based on the perspective of various stakeholder groups. As an important resource source for firms, stakeholders exert expectations and influence while providing resources [21]. To some extent, the active fulfillment of CSR is a response to the demands of stakeholders [22]. In contrast, CSIR engages in harmful activities that benefit a few but cause substantial net harm, leading to negative reactions and punitive actions from stakeholders [23,24].
Business activities comprise a series of exchanges based on contracts. As is generally believed, the contractual relationship between an enterprise and various stakeholders is essentially a transaction relationship formed on the premise of the market [25]. While the transaction relationship is destroyed by CSIR, punishment from various stakeholders might directly lead to increased transaction costs for firms because companies not only lose resources and support from stakeholders but also spend more time and money on maintaining and rebuilding relationships with them. Moreover, Cuypers et al. [26] recently proposed that many CSR initiatives meet the transaction cost theory (TCT) agenda. On this basis, we explore CSIR punishments from stakeholders by introducing transaction costs. Furthermore, once CSIR behavior is exposed, the enterprise needs to respond quickly to stakeholders to avoid or reduce the loss, which reflects the crisis management capacity. Hence, we introduced crisis management ability as a moderating variable.
As one of the world’s fastest-growing major emerging economies, China has a new business operation environment [27]. Under the exhortation of a “vigorously developing economy” in the past 40 years, China has fully focused on economic development, and neglected a lot of social and environmental issues caused by companies. Many enterprises with poor awareness of laws and social value creation damage the legitimate rights and interests of stakeholders for profit. However, as China has become increasingly concerned with the ever-growing need for a better life in recent years, stakeholders have higher expectations and requirements for enterprises to undertake social responsibility. Due to the institutional environment of uneven development among regions in China, stakeholders in different regions might differ in their tolerance and sensitivity to CSIR behaviors. Thus, we introduce the level of regional economic development as another moderating variable.
Based on China’s CSIR status and deficiencies of existing research, this study examines how stakeholder groups react to CSIR by combining stakeholder theory with transaction costs in human resources, energy obtaining, taxation, and financing. It also contributes to the research on CSIR consequences and provides new insights for understanding transaction costs from the perspective of stakeholders.

2. Theoretical Framework and Hypotheses Development

2.1. CSIR from Stakeholders’ Perspective

As a general model in business management, shareholder theory had the upper hand for a long time, holding that the main responsibility of a company is to maximize the wealth of shareholders [28]. The debate on the value of shareholder and stakeholder theories restarted during the financial crisis. Some scholars call for the rejection of the shareholder-oriented business approach, as it neglects being sensitive and alert to constituents in the internal and external business environment. These constituents, known as stakeholders, are defined as any individual or group that affects or is affected by the organization and its processes, activities, and functioning [29], including shareholders, employees, other resource suppliers, customers, and the natural environment, together with the public stakeholder group, the government, and community that provide infrastructure and markets [30], all of which simultaneously accelerate or decelerate a firm’s success.
As a kind of “negative signal” transmission, CSIR not only causes resistance from directly damaged stakeholders but also transmits negative emotions to other stakeholders through the signal transmission mechanism, thus causing moral anger and reselection of many stakeholders. Firms will bear a series of losses, such as reputation loss, brain drain, legal sanctions, financing difficulties, and consumer resistance, which directly affect operations and sustainability. Moreover, some social problems, such as environmental degradation, now surpass the authority of any central government. Thus, any solution to these problems may depend on how the balance between firms and stakeholders [31].

2.2. CSIR and Transaction Costs

The stakeholder theory indicates that the existence of an enterprise is a “set of contracts” concluded by various stakeholders. Therefore, the contractual relationship between enterprises and stakeholders is essentially a “transaction relationship” [22]. Firms that follow their prescriptions economize on transaction costs and perform better than those that do not [32]. However, the “transaction relationship” will inevitably be destroyed when the company ignores social responsibility, and then stakeholders will respond to their negative reactions and punitive actions [24]. Especially when firms with high CSR reputations experience CSIR events, their stakeholders impose stricter punishments. The enterprise must certainly spend a higher series of costs, such as search and negotiation, to maintain the original transaction relationship, which leads to an increase in the transaction costs of the enterprise [25].
As part of a company’s opportunism, CSIR inevitably affects transaction costs. King’s analysis reveals that the interaction between firms and stakeholders represents a fruitful area for extending the transaction cost theory [31]. The non-ethical atmosphere created by CSIR may lead to higher employee turnover and increased human resource costs. Investors’ loss of confidence may increase financing costs. Unsupportive communities may increase legal and public relations overhead [33]. Therefore, we discuss the human resources, energy obtaining, taxation, and financing included in the transaction cost from the perspective of different stakeholders.

2.2.1. CSIR and Human Resource Costs

Human resource costs refer to costs incurred by an organization to acquire or replace human resources, including the acquisition cost (historical cost) and replacement cost of human resources. A responsible corporate image can enhance the attractiveness of an organization as an employer and increase organizational commitment [34]. Correspondingly, when an organization’s reputation is damaged by CSIR, social identity theory would predict a detrimental effect on employees’ work attitudes [35] and an increase in employee turnover and recruitment costs [11]. Hence, we set the hypothesis as follows:
Hypothesis 1a.
CSIR increases the human resource cost.

2.2.2. CSIR and Energy Obtaining Costs

Energy obtaining costs refer to the direct and indirect costs of obtaining energy for corporations, such as the price of acquiring water resources. The energy consumption in developing Asian countries has increased over the past few decades. Owing to the massive use of fossil fuels, the ecological environment continues to deteriorate, and environmental problems are receiving increasing attention. In the context of “a resource-conserving, environment-friendly society,” corporate social responsibilities have been increasingly more prominent within government, enterprises, and consumers [36]. However, CSIR may destroy the local environment and increase the government’s cost of restoring the natural environment, leading to sequential sanctions from the government, such as imposing fines, forcing the resignation of corporate leaders, initiating lawsuits, and shutting down factories [37]. Particularly, the local government and community may not allow or make it harder for the corporation to obtain energy from this place. Thus,
Hypothesis 1b.
CSIR increases the energy obtaining cost.

2.2.3. CSIR and Taxation Costs

The taxation costs of corporations refer to the cost paid by corporations to fulfill their tax obligations and the direct and indirect losses caused by improper acts such as tax evasion. As an important stakeholder of firms in China [38], authorities pay more attention to whether enterprises pay taxes on time and whether they violate laws and regulations. To some extent, taxation is negotiable in China. Lin et al. [39] pointed out that firms donating additional resources to CSR activities would enjoy greater tax savings and lower tax rates while maintaining their tax risk at relatively low levels. However, certain government departments monitor and punish enterprises for their irresponsible behavior. For example, enterprises with tax evasion are likely to lose preferential policies or financial support from the government, and face stricter supervision, ultimately leading to increased taxation costs. Therefore,
Hypothesis 1c.
CSIR increases the taxation cost.

2.2.4. CSIR and Financing Costs

Financing costs are affected by many factors, including financial policies, development prospects of enterprises, profitability, operating and financial status, enterprise size, and reputation. With the increasing recognition of environmental, social, and governance (ESG) risk by banks and investors, most studies have confirmed that certain aspects of ESG can reduce corporate financing costs [40]. Companies with good CSR performance tend to obtain bank loans with lower costs, longer maturities, and fewer financing constraints on enterprises [41]. In contrast, scholars found that CSIR may harm financing and raise transaction costs in the financing process. Zhang et al. [42] argue that corporate violations would increase credit risk and decrease the reliability of a company’s financial information. Bauer and Hann [43] used a sample of 2242 bonds in the United States and found that corporate irresponsibility gives rise to higher credit and financing costs. Thus,
Hypothesis 1d.
CSIR increases the financing cost.

2.3. The Moderating Effect of Crisis Management Capacity

An incident that is viewed as a crisis, such as an aircraft explosion, oil spill, or a scandal, is taken as a threat to the organizational reputation [44] (Turner, 1976). In such a crisis, followers withdraw support and loyalty to key decision-makers. Crisis management is a systematic attempt by organizational members with stakeholders to avert crises or to effectively manage those that do occur, to minimize potential losses [45], concern with CSIR, repair reputation, and/or prevent reputation damage [46]. Crisis management affects how stakeholders interact with organizations [47]. Better crisis management capacity is likely to reduce internal and external members’ questions on corporate cultural beliefs [48], influence stakeholders’ views, and maintain and quickly repair relationships with them. Since many crises and scandals are highly related to CSIR behaviors, a better crisis management capacity is likely to weaken the negative impact of CSIR, thus saving transaction costs. Therefore,
Hypothesis 2.
Crisis management capacity weakens the positive effect of CSIR on transaction costs.

2.4. The Moderating Effect of Regional Economic Development Level

In China, the level of economic development varies significantly and exhibits different regional characteristics. Due to certain differences in the degree of marketization, in regions with better economic development, the operational efficiency and infrastructure of markets, such as laws, labor market, and public service, are more beneficial [49]. More complete laws and regulations increase the intensity and efficiency of punishments for CSIR [50]. The levels of public education and media exposure are often higher. Therefore, local communities and residents have higher expectations for enterprises and are more sensitive to CSR/CSIR. Additionally, higher media exposure enables stakeholders to respond stronger positively/negatively through higher corporate visibility [3]. Thus,
Hypothesis 3.
The regional economic development level strengthens the positive effect of CSIR on transaction costs.

3. Data, Measures, and Estimation Methods

3.1. Data and Sample

The data are from a private enterprise research group composed of staff from the United Front Work Department of the CPC Central Committee, All-China Federation of Industry and Commerce, State Administration for Market Regulation, Chinese Academy of Social Sciences, and China Society for the Study of the Private-Sector Economy. The research group conducts a nationwide sampling survey on the situation of private enterprises every two years; 2018 is the 13th data survey and covers 7473 firms. The questionnaire was filled out anonymously by entrepreneurs and private firms covering 31 provinces, autonomous regions, municipalities, and 15 different industries in this investigation, which makes the sample representative of the entire population of registered private firms in China. International scholars have widely used these data and published papers in top journals [51,52,53]. Concerning the CSIR and transaction cost data, some of the questionnaires were not fully filled, and we ended up with a final sample of 2618 firms. In addition, we winsorized the samples with outliers in the data-processing procedure.

3.2. Variable Measurements

3.2.1. Independent Variable

Corporate social irresponsibility. According to Clarkson [30], the CSIR behavior of private enterprises in this study is measured as the natural logarithm of the sum of fines because of bad behavior in five fields: environment, community, employees, consumers, and government. In addition, we also create a CSIR dummy variable for a robust test, coded 1 for firms with fines in any dimension of five, and 0 for firms that were not penalized in 2017.

3.2.2. Dependent Variables

Transaction costs. In this study, we focus on the change in transaction costs that occurs in the transaction process of an enterprise rather than the costs resulting from the material production process, which are specifically divided into human resources, energy obtaining, taxation, and financing costs, which are generated in the interaction of firms and important stakeholders. We exclude the cost in the course of exchange between enterprises and customers, who are important stakeholders, because these costs are reflected in some accounting indicators, such as sales revenue, advertising investment, and profit. The variation trend of these four types of costs was measured using a 5-point Likert scale in the questionnaire survey: 1 for obvious decrease, 2 for some decrease, 3 for no change, 4 for some increase, and 5 for obvious increase.

3.2.3. Moderating Variables

Crisis management capacity. We use a proxy variable, in which entrepreneurs evaluate their enterprise’s crisis management capacity by ticking four different degrees of evaluation—high, middle, low, and hard to say—to measure crisis management capacity. We coded the degree of high evaluation as 1 and 0 for the other three degrees.
Regional economic development level. We used the real GDP per capita of each province as a proxy to measure the regional economic development level. We further set it to a binary variable, which is coded 1 for those provinces whose real GDP per capita is higher than the median of all provinces and 0 for those provinces with low real GDP per capita.

3.2.4. Control Variables

We control for a train of characteristics of the firm that may affect transaction costs. Firm size, age, leverage, and industry were included in this research. Firm size is measured by the natural logarithm of a firm’s net assets. Large enterprises usually have a significant gap with small enterprises in transaction cost, and larger companies get greater attention from stakeholders. Firm leverage is measured by the asset–liability ratio. We also control the revenue on equity (ROE) which embodies the operating status and strength of an enterprise. A company with a higher ROE may have a better financial evaluation, and more funds will be invested in advertising or publicity to maintain good contact and communication with stakeholders. We also considered the state-owned capital variable, measured as the proportion of the state-owned capital in the firm’s net asset, since corporates with state-owned capital have natural political connections which may give them advantages in financing and obtaining resources.
Furthermore, we control political connection and corporate philanthropy in our model. As a critical stakeholder of enterprises, the government, to a large extent, plays a considerable role in firms’ transactions. Based on the existing scholars’ measurement of political ties [54,55], for entrepreneurs with any of the two identities of a deputy to the National People’s Congress at all levels or a member of the Chinese People’s Political Consultative Conference (CPPCC), the value is 1; otherwise, the value is 0. Corporate philanthropy can improve the relationships between firms and stakeholders [56], which is likely to reduce firms’ transaction costs. It is measured by the amount of corporate philanthropy of enterprises and takes the natural logarithm of the amount of charitable donation.
Finally, stakeholders have different views and attention on CSIR behavior in different industries, thus the influences on transaction costs might vary in different industries. Therefore, we set 14 industries as dummies, representing 15 industry categories identified by the questionnaire, to control for the difference among industries.

3.3. Estimation Method

Since the four kinds of costs—human resource costs, energy obtaining costs, taxation costs, and financing costs—are ordinal categorical variables, we directly apply the linear model for the estimation. Furthermore, we adopted a robust estimation in the regression to solve heteroscedasticity, which is common in cross-sectional data.

4. Results

The descriptive statistics and correlation matrix are presented in Table 1. The results show that the correlation coefficients between variables are relatively small. The highest value of variance inflation factors (VIFs) in our model was 3.27 (CSIR), well below the general cutoff of 10 for regression models. Therefore, multicollinearity did not pose a serious concern. The mean (0.057) of the variable CSIR dummy indicates that 5.69 percent of private firms in China were fined for CSIR behaviors. The Pearson correlation coefficients between CSIR and the four types of transaction costs were positive and salient (0.082, 0.095, 0.055, and 0.074).
Table 2 presents the results of the multiple regression models. Models 1–4 report the effects of the control variables. Firm size shows a significantly positive relationship with the four transaction costs. Firm leverage is significantly and positively correlated with human resources, taxation, and financing costs.
Models 5–8 include the independent variable CSIR. In keeping with our predictions, CSIR indicates a positive relationship with four transaction costs, and all the relationships are salient (βhuman = 0.072, p < 0.05; βenergy = 0.094, p < 0.01; βtax = 0.076, p < 0.05; βfinancing = 0.076, p < 0.05), suggesting that firms’ irresponsibility behaviors can increase their transaction costs. However, these relationships have different degrees of significance; CSIR has a stronger effect on energy obtaining costs, which implies that different stakeholders have different reactions to corporate social irresponsibility. These results support hypothesis 1.
Hypothesis 2 proposes the moderating role of crisis managementent capacity on the relationship between CSIR and four transaction costs: human resources, energy obtaining, taxation, and financing costs. Table 3 presents the results of the moderating effects. In models 9–12, we add the moderating variable, crisis management capacity, into the regression equations. In the last four models 13–16, the interaction terms between the CSIR and moderator are added. The moderating effects on the correlations between CSIR and human resources and taxation costs are significant and negative (βhuman = −0.158, p < 0.05; βtax = −0.142, p < 0.05). However, it was not significant for energy obtaining and financing costs, which partially supports H2.
Hypothesis 3 predicts that the positive effects of CSIR and transaction costs are strengthened in regions with higher real GDP per capita. Table 4 reports the results of the moderating effects of the regional economic development level. Models 17–20 have the moderator added and the interaction terms are added to models 21–24. Coefficient estimates of the interaction terms between CSIR and economic development level on human resources, energy obtaining, and taxation costs (βhuman = 0.103, p < 0.1; βenergy = 0.085, p < 0.1; βtax = 0.145, p < 0.05) were significantly positive, while that on financing costs was not salient, partially supporting H3.
We also checked the robustness of the results in models 5–8 by replacing CSIR with the CSIR dummy. The results are presented in Table 5. Similarly, the CSIR dummy is significantly and positively associated with human resources, energy obtaining, taxation, and financing costs, demonstrating the robustness of our research findings.

5. Discussion

The relationship between CSIR and financial performance is complex. Inspired by the research of Cuypers et al. [26], this study investigated the reactions of different stakeholder groups to CSIR and the punishment of companies by introducing transaction costs in human resources, energy, taxation, and financing. Different from previous studies targeting a specific group [57,58,59], this paper considers the responses of various stakeholder groups. We believe that this is an exploration of the underlying mechanism and that the difference between increased transaction costs and increased profits from CSIR can explain the conflicting results of previous research on financial performance [13,15,16,17,18].
Inconsistent with the claim of a cost-saving strategy [17], our findings show that CSIR will increase transaction costs for enterprises, which proves the theoretical concept proposed by Li and Xu [25]. As a symbol of opportunism and morality shortage, CSIR would damage the established stakeholder relationships [14]. In this circumstance, there should be less CSIR. However, a large number of CSIR behaviors still exist in Chinese business. Considering that our results are only a trend and not a specific value, which indicates that the punishment might be not serious enough to prevent enterprises from “doing bad” due to inadequate monitoring systems and uneven regional development in China. Thus, we introduced the regional economic development level as a moderator for further analysis.
In line with previous research that regional development level affects some consequences of corporate actions [50,60], we found that stakeholders in different regions might differ in tolerance and sensitivity to CSIR behaviors, and enterprises in more developed areas have more severe punishments. Therefore, we can foresee that with China’s development, stakeholders are increasingly known to have higher requirements and expectations for enterprises. Only if the punishment of transaction costs increases and reaches a level that enterprises cannot easily afford, will the frequency of CSIR in China inevitably decrease.
The crisis management capacity of firms weakens the positive effect of CSIR on transaction costs to some extent in our empirical results, which is demonstrated in assumptions about human resource costs and taxation costs but fails to support the results for energy obtaining costs and financing costs. The findings indicate that compared with external stakeholders, an enterprise’s excellent crisis management capacity is more likely to repair the relationship between internal stakeholders, such as employees [61]. Moreover, crisis management can have an immediate effect on taxation costs, at least in terms of the fines. As for energy obtaining and financing, maybe due to the high level of risk control of these stakeholders in monopolistic industries such as petroleum, electricity, and banks, a CSIR crisis can give them a lot of information about the company, so crisis management may not be effective. Research shows that broken trust can be repaired, with much depending on the violator’s response [62]. In view of the prevalence of trust failure in organizations and the severity of its consequences, repairing the trust of various stakeholders has actually become a “key management ability” [63]. Imperfect as it may be, our findings suggest that firms’ crisis management in CSIR deserves attention and development.

6. Conclusions

Previous research has mainly focused on the impact of CSIR behavior on a specific group, and few studies have considered the respective reactions to CSIR among various stakeholder groups as well as the implications of these reactions. Based on stakeholder theory, this study examines CSIR punishments from various stakeholders by introducing transaction costs. Our research proves that CSIR behaviors destroy contractual relationships with stakeholders and punitive reactions from stakeholders ultimately affect corporate transaction costs, although the punishment for corporate irresponsible behaviors may not be strong enough to deter enterprises from irresponsibility in China. The findings generate theoretical contributions and managerial implications.
First, this paper contributes to the research on CSIR consequences and the multilevel application of stakeholder theory. Moreover, our work provides new insight for understanding transaction costs, which is a response to Cuypers et al.’s [26] proposal, combining corporate social (ir)responsibility with the transaction cost. The future of transaction cost theory will be as bright as its past.
Second, our findings indicate that stakeholders’ punishment for CSIR will become more severe with the development of society. Former agency theorists pursue shareholder capitalism and ignore how governance can enable a firm to cooperate with all its stakeholders in creating and distributing economic value [64]. In moving toward stakeholder capitalism, in which companies serve customers, employees, the environment, and investors, business leaders need to recognize that their success depends on collective effort and incorporating stakeholder governance cogitation in operational decisions.
The main limitation of our study is that the results show that CSIR induces punitive actions by stakeholders, leading to an increase in corporate transaction costs instead of an exact increase. The challenge of measuring transaction costs remains, and further explorations of the different degrees of CSIR punishment from various stakeholders are needed in future research.

Author Contributions

Conceptualization, T.F.; methodology, T.F. and B.T.; software, B.T.; validation, T.F., F.Y. and B.T.; formal analysis, T.F., F.Y. and B.T.; investigation, T.F.; resources, T.F.; data curation, T.F. and B.T.; writing—original draft preparation, T.F., F.Y. and B.T.; writing—review and editing, T.F., F.Y. and J.W.; visualization, F.Y.; supervision, T.F.; project administration, T.F.; funding acquisition, T.F. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by the National Natural Science Foundation of China, grant number is 71772028.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data in this study are available from the Chinese Academy of Social Sciences (CASS) on request.

Acknowledgments

This paper benefited from discussions at the 81st Annual Meeting of the Academy of Management, 2021.

Conflicts of Interest

The authors declare no conflict of interest.

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Table
Table 1. Descriptive statistics and correlations.
Table 1. Descriptive statistics and correlations.
VariableMenaS.D.123456789101112131415
Human resource cost3.8020.7971
Energy cost3.6280.7760.514 ***1
Tax cost2.9150.8950.165 ***0.146 ***1
Financing cost3.2410.7730.290 ***0.275 ***0.378 ***1
CSIR dummy0.05690.2320.105 ***0.092 ***0.069 ***0.070 ***1
CSIR0.1090.5650.082 ***0.095 ***0.055 ***0.074 ***0.786 ***1
Crisis managementnt capacity0.2280.420.026−0.0210.071 ***0.033 *−0.0040.0061
Economic development level0.6890.4630.048 **0.0110.059 ***0.020.0190.010.057 ***1
Firm size6.5042.640.161 ***0.122 ***0.128 ***0.140 ***0.104 ***0.101 ***0.248 ***0.059 ***1
Firm age11.467.1540.104 ***0.068 ***0.055 ***0.030.088 ***0.080 ***0.089 ***0.121 ***0.424 ***1
Firm leverage0.2750.2850.122 ***0.047 **0.068 ***0.101 ***0.092 ***0.085 ***0.072 ***0.051 ***0.340 ***0.217 ***1
ROE0.1350.296−0.01600.0170.0120.0060.0120.042 **−0.021−0.152 ***−0.022−0.106 ***1
State capital0.8797.489−0.0320.003−0.0090.0070.0120.0130.036 *−0.056 ***0.042 **0.010.000.050 **1
Political connection0.3370.4730.113 ***0.086 ***0.053 ***0.051 ***0.083 ***0.082 ***0.170 ***0.0010.433 ***0.289 ***0.231 ***−0.0130.051 ***1
Corporate philanthropy0.9411.4080.122 ***0.088 ***0.084 ***0.098 ***0.095 ***0.120 ***0.206 ***0.0230.520 ***0.316 ***0.181 ***0.081 ***0.0310.431 ***1
Note. * p < 0.1; ** p < 0.05; *** p < 0.01. N = 2618.
Table
Table 2. Effects of CSIR on transaction costs.
Table 2. Effects of CSIR on transaction costs.
(1)(2)(3)(4)(5)(6)(7)(8)
Human_cEnergy_ cTaxation_cFinancing_cHuman_cEnergy_ cTaxation_cFinancing_c
Intercept3.383 ***3.429 ***2.661 ***3.093 ***3.384 ***3.430 ***2.662 ***3.094 ***
(0.065)(0.060)(0.075)(0.060)(0.065)(0.060)(0.075)(0.060)
Firm size0.025 ***0.024 ***0.044 ***0.035 ***0.025 ***0.024 ***0.044 ***0.035 ***
(0.008)(0.008)(0.009)(0.008)(0.008)(0.008)(0.009)(0.008)
Firm age0.002−0.000−0.000−0.005 *0.002−0.000−0.000−0.005 **
(0.002)(0.002)(0.003)(0.002)(0.002)(0.002)(0.003)(0.002)
Firm leverage0.179 ***−0.0180.111 *0.186 ***0.173 ***−0.0260.1050.180 ***
(0.057)(0.057)(0.066)(0.057)(0.057)(0.057)(0.065)(0.057)
ROE−0.0010.0310.108 *0.093 *−0.0020.0290.107 *0.091 *
(0.057)(0.054)(0.061)(0.050)(0.057)(0.054)(0.061)(0.050)
State capital−0.004−0.000−0.002−0.000−0.004−0.000−0.002−0.000
(0.003)(0.002)(0.003)(0.002)(0.003)(0.002)(0.003)(0.002)
Political connection0.065 *0.059−0.015−0.0440.0630.056−0.017−0.046
(0.039)(0.036)(0.043)(0.037)(0.038)(0.036)(0.043)(0.037)
Corporate philanthropy0.0170.0060.0150.0210.0150.0030.0130.019
(0.015)(0.014)(0.015)(0.013)(0.015)(0.014)(0.015)(0.013)
CSIR 0.072 **0.094 ***0.076 **0.076 **
(0.032)(0.028)(0.034)(0.029)
Industrycontrolcontrolcontrolcontrolcontrolcontrolcontrolcontrol
R20.0520.0360.0350.0360.0550.0410.0370.039
Adj. R20.0440.0280.0270.0280.0470.0320.0290.031
F7.3554.5634.2904.6507.2454.9724.3334.832
Note. Standard errors are shown in parentheses. * p < 0.1; ** p < 0.05; *** p < 0.01, N = 2618.
Table
Table 3. Moderating effect of crisis management capacity.
Table 3. Moderating effect of crisis management capacity.
(9)(10)(11)(12)(13)(14)(15)(16)
Human_cEnergy_ cTaxation_cFinancing_cHuman_cEnergy_ cTaxation_cFinancing_c
Intercept3.384 ***3.429 ***2.663 ***3.094 ***3.383 ***3.429 ***2.662 ***3.094 ***
(0.065)(0.060)(0.075)(0.060)(0.065)(0.060)(0.075)(0.060)
Firm size0.026 ***0.028 ***0.042 ***0.035 ***0.025 ***0.027 ***0.041 ***0.035 ***
(0.008)(0.008)(0.009)(0.008)(0.008)(0.008)(0.009)(0.008)
Firm age0.002−0.001−0.000−0.005 **0.002−0.001−0.000−0.005 **
(0.002)(0.002)(0.003)(0.002)(0.002)(0.002)(0.003)(0.002)
Firm leverage0.173 ***−0.0260.1050.180 ***0.172 ***−0.0270.1040.180 ***
(0.057)(0.057)(0.065)(0.057)(0.057)(0.057)(0.065)(0.057)
ROE−0.0000.0370.0990.092 *0.0030.0390.102 *0.093 *
(0.057)(0.054)(0.061)(0.050)(0.057)(0.054)(0.061)(0.050)
State capital−0.004−0.000−0.002−0.000−0.004−0.000−0.002−0.000
(0.003)(0.002)(0.003)(0.002)(0.003)(0.002)(0.003)(0.002)
Political connection0.064 *0.061 *−0.021−0.0450.064 *0.061 *−0.021−0.045
(0.038)(0.036)(0.043)(0.037)(0.038)(0.036)(0.043)(0.037)
Corporate philanthropy0.0160.0050.0110.0190.0160.0060.0110.019
(0.015)(0.014)(0.015)(0.013)(0.015)(0.014)(0.015)(0.013)
CSIR0.071 **0.094 ***0.076 **0.075 **0.118 ***0.114 ***0.119 ***0.082 **
(0.032)(0.027)(0.034)(0.029)(0.024)(0.030)(0.042)(0.039)
Crisis management capacity−0.024−0.090 **0.077 *−0.010−0.019−0.088 **0.081 *−0.009
(0.039)(0.038)(0.046)(0.038)(0.039)(0.038)(0.046)(0.038)
CSIR * Crisis management capacity −0.158 **−0.066−0.142 **−0.022
(0.071)(0.058)(0.062)(0.053)
Industrycontrolcontrolcontrolcontrolcontrolcontrolcontrolcontrol
R20.0550.0430.0390.0390.0570.0430.0400.039
Adj. R20.0460.0340.0300.0310.0490.0340.0310.030
F7.0164.9804.2664.6227.8324.9494.2154.472
Note. Standard errors are shown in parentheses. * p < 0.1; ** p < 0.05; *** p < 0.01, N = 2618.
Table
Table 4. Moderating effect of regional economic development level.
Table 4. Moderating effect of regional economic development level.
(17)(18)(19)(20)(21)(22)(23)(24)
Human_cEnergy_ cTaxation_cFinancing_cHuman_cEnergy_ cTaxation_cFinancing_c
Intercept3.362 ***3.426 ***2.613 ***3.079 ***3.367 ***3.430 ***2.619 ***3.076 ***
(0.066)(0.063)(0.077)(0.062)(0.066)(0.063)(0.077)(0.063)
Firm size0.025 ***0.024 ***0.045 ***0.035 ***0.025 ***0.024 ***0.045 ***0.035 ***
(0.008)(0.008)(0.009)(0.008)(0.008)(0.008)(0.009)(0.008)
Firm age0.002−0.000−0.001−0.005 **0.002−0.000−0.001−0.005 **
(0.002)(0.002)(0.003)(0.002)(0.002)(0.002)(0.003)(0.002)
Firm leverage0.172 ***−0.0260.1030.179 ***0.172 ***−0.0260.1030.179 ***
(0.057)(0.057)(0.065)(0.057)(0.057)(0.057)(0.065)(0.057)
ROE−0.0010.0290.110 *0.093 *−0.0010.0290.109 *0.093 *
(0.057)(0.054)(0.061)(0.050)(0.057)(0.054)(0.061)(0.050)
State capital−0.004−0.000−0.001−0.000−0.004−0.000−0.001−0.000
(0.003)(0.002)(0.003)(0.002)(0.003)(0.002)(0.003)(0.002)
Political connection0.065 *0.057−0.012−0.0440.066 *0.058−0.011−0.045
(0.038)(0.036)(0.043)(0.037)(0.038)(0.036)(0.043)(0.037)
Corporate philanthropy0.0150.0030.0130.0190.0160.0040.0140.019
(0.015)(0.014)(0.015)(0.013)(0.015)(0.014)(0.015)(0.013)
CSIR0.072 **0.095 ***0.076 **0.076 **0.0010.036−0.0240.121 **
(0.032)(0.028)(0.034)(0.029)(0.048)(0.039)(0.057)(0.049)
Economic development level0.0450.0080.102 ***0.0310.0440.0080.101 ***0.032
(0.034)(0.034)(0.039)(0.034)(0.034)(0.034)(0.039)(0.034)
CSIR * Economic development level 0.103 *0.085 *0.145 **−0.066
(0.062)(0.051)(0.069)(0.060)
Industrycontrolcontrolcontrolcontrolcontrolcontrolcontrolcontrol
R20.0550.0410.0400.0390.0560.0410.0420.040
Adj. R20.0470.0320.0320.0310.0480.0330.0330.031
F7.0904.7574.5294.6366.7424.5804.5054.520
Note. Standard errors are shown in parentheses. * p < 0.1; ** p < 0.05; *** p < 0.01, N = 2618.
Table
Table 5. Effects of CSIR on transaction costs (robustness check).
Table 5. Effects of CSIR on transaction costs (robustness check).
(17)(18)(19)(20)
Human_cEnergy_ cTaxation_cFinancing_c
Intercept3.382 ***3.428 ***2.661 ***3.093 ***
(0.065)(0.060)(0.075)(0.060)
Firm size0.025 ***0.024 ***0.044 ***0.034 ***
(0.008)(0.008)(0.009)(0.008)
Firm age0.002−0.000−0.000−0.005 **
(0.002)(0.002)(0.003)(0.002)
Firm leverage0.170 ***−0.0270.1020.180 ***
(0.057)(0.057)(0.065)(0.057)
ROE−0.0030.0290.106 *0.091 *
(0.056)(0.054)(0.061)(0.050)
State capital−0.004−0.000−0.002−0.000
(0.003)(0.002)(0.003)(0.002)
Political connection0.0620.056−0.018−0.046
(0.038)(0.036)(0.043)(0.037)
Corporate philanthropy0.0160.0050.0140.020
(0.015)(0.014)(0.015)(0.013)
CSIR dummy0.261 ***0.225 ***0.247 ***0.172 ***
(0.059)(0.060)(0.082)(0.066)
Industrycontrolcontrolcontrolcontrol
R20.0580.0400.0390.039
Adj. R20.0500.0320.0310.031
F8.1915.0864.5624.816
Note. Standard errors are shown in parentheses. * p < 0.1; ** p < 0.05; *** p < 0.01, N = 2618.
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Feng, T.; Yang, F.; Tan, B.; Wu, J. Corporate Social Irresponsibility Punishments from Stakeholders—Evidence from China. Sustainability 2022, 14, 4678. https://doi.org/10.3390/su14084678

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Feng T, Yang F, Tan B, Wu J. Corporate Social Irresponsibility Punishments from Stakeholders—Evidence from China. Sustainability. 2022; 14(8):4678. https://doi.org/10.3390/su14084678

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Feng, Tianli, Fan Yang, Biao Tan, and Jihong Wu. 2022. "Corporate Social Irresponsibility Punishments from Stakeholders—Evidence from China" Sustainability 14, no. 8: 4678. https://doi.org/10.3390/su14084678

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