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Corporate Social Responsibility and Operating Performance: The Role of Local Character in Emerging Economies

Author

Listed:
  • Fang He

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

  • Xin Miao

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

  • Christina W.Y. Wong

    (Business Division, The Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hunghom, Kowloon, Hong Kong)

  • Yanhong Tang

    (School of Public Administration and Law, Northeast Agricultural University, Harbin 150030, China)

Abstract

Local character can shape corporate resource accumulation and utilization, especially in emerging economies, and accordingly plays an important role in affecting the performance results of corporate social responsibility (CSR) practices. This paper thus aims to examine how local character affects the performance results of CSR practices. Drawing on the resource dependence theory and resource orchestration view, this study empirically investigates the effects of internal character (in terms of state ownership) and external local character (in terms of eight-dimension infrastructure) on the relationship between CSR and operating performance. Using samples of firms listed in the Chinese CSI 300 (capitalization weighted stock market index) in the years 2012 and 2016 and applying hierarchical multiple regression analysis, this study empirically verifies that CSR has a positive effect on corporate operating performance, and state ownership and infrastructure positively moderate the performance results of CSR efforts. Additionally, the results show that three dimensions (environmental, social, and governance) of CSR practices impact performance differently. Overall, this study unveils the crucial role of the local character on CSR to achieve performance and carries important theoretical and practical implications. Future research should include long panel data to increase statistical power as well as explore the linkage and synergy effect of CSR and governmental social responsibility (GSR).

Suggested Citation

  • Fang He & Xin Miao & Christina W.Y. Wong & Yanhong Tang, 2020. "Corporate Social Responsibility and Operating Performance: The Role of Local Character in Emerging Economies," Sustainability, MDPI, vol. 12(12), pages 1-25, June.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:12:p:4874-:d:371697
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    2. Manish Bansal, 2024. "Unpacking the drivers of earnings management in CSR firms: influence of investor risk perception," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(1), pages 127-142, March.

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