Do SOEs outperform private enterprises in CSR? Evidence from China

Abstract

Purpose The purpose of this paper is to explore the relationship between firm size, the nature of ownership and corporate social responsibility (CSR) performance in China and to figure out the reason that state-owned enterprises (SOEs) usually perform better in CSR activities than private enterprises. Design/methodology/approach The authors conducted two studies of CSR in China. In the first study, the authors developed and assessed a CSR measure; second study was to investigate the difference of CSR behavioral performance between SOEs and private enterprises. Findings The authors found that the differences in CSR performances between SOEs and private enterprises were not caused by the nature of ownership as most Chinese scholars used to believe. Actually, the differences came from the differences of firm size, which had been ignored in prior studies on factors influencing CSR performance. The size of SOEs is usually much larger than private enterprises, and larger enterprises often perform better in the field of CSR. In a word, the size rather than the nature of ownership is the main reason that CSR performances of SOEs are better than private enterprises. Originality/value Though many papers in China suggested that SOEs performed much better than private enterprises in CSR activities, the authors proved that this belief was a misunderstanding. It was found that SOEs were usually larger than private enterprises, which might have confused their efforts to find the real reason that SOEs and private enterprises perform differently in CSR. The authors also developed a measuring tool of CSR based on the Stakeholder Theory, which would be a new measurement tool for future studies, especially for emerging market economies and unlisted companies.

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

“…However, the value of the coefficient is higher in non-SOEs, which indicates that the relationship between CSRP and CFP is more prominent in non-SOEs as compared to their counterparts, as Hypothesis 3 predicts. The government persuades the SOEs to participate in social activities [72], while non-SOEs choose strategic CSR based on cost-benefit analysis rather than institutional pressures [48]. Table 6.…”

“…The government provides sufficient financial support to SOEs [64,65], motivating executives to engage in social welfare [70]. The Chinese government also offers more subsidies to the state executives [71], and thus persuades them to participate in social activities [72]. Zheng and Zhang [73] reported that SOEs are more substantial than their counterparts, which often perform better in CSR.…”

“…The ownership structure across countries affect the relationship between stakeholders of a company [78]. The most potent stakeholder (the government) facilitates SOEs during financial distress for their CSR involvement [72,73], and thus CSR leads to better financial performance of firms [58]. However, Li et al [79] found that the link of CSRP-CFP is weaker in SOEs as compared with non-SOEs, and highlighted several reasons for this discrepancy.…”

Do Political Connections Promote Innovation in Environmentally Polluting Enterprises?

“…Zhao and Sun (2016) Environmental regulations create a national standard with which enterprises have to comply. SOEs have played a leading role in fulfilling social responsibilities and have attempted to portray themselves as models for other enterprises to emulate (Zheng and Zhang, 2016). Thus, we argue that environment regulations are not expected to affect SOEs because they have already complied with regulations.…”

Ownership Reduction in State-Owned Enterprises and Corporate Social Responsibility: Perspective from Secondary Privatization in China

“…SOEs also respond to pressure received from other stakeholders, i.e., media and from society at large with respect tosocial involvement [6]. Moreover, the role of state shareholders is more emphasized in a way that leads to taking more interest in corporate social responsibilities (CSR) [7,8]. The stakeholder salience theory put forward by Mitchell et al [9] also proposed that dominant state shareholders may have a greater influence over a firm's strategic decisions, as firms normally react to powerful stakeholders.…”