IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v29y2022i2p339-355.html
   My bibliography  Save this article

The philanthropic response of substantive and symbolic corporate social responsibility strategies to COVID‐19 crisis: Evidence from China

Author

Listed:
  • Ma Zhong
  • Weiqi Zhao
  • Yasir Shahab

Abstract

The COVID‐19 epidemic broke out in China in January 2020, which triggered the largest wave of corporate philanthropic donations since the 2008 Sichuan earthquake. Based on A‐share listed firms in the Shanghai and Shenzhen stock exchanges in 2020, we study whether substantive and symbolic corporate social responsibility (CSR) strategies affect corporate philanthropic responses during the COVID‐19 crisis. We use the lagged annual donation and technical dimension scores (T scores) of rankins ratings (RKS) as proxies of CSR performance and CSR disclosure and then define the CSR gap as the gap between the two. The results show that substantive and symbolic strategies cause firms to have material differential responses in the COVID‐19 crisis. Specifically, the CSR gap is negatively related to the possibility and the level of crisis donation. In addition, (1) this difference is more pronounced in the earlier period of the COVID‐19 crisis; (2) the negative correlation is more pronounced in private firms; and (3) the crisis donation of firms with either strategy obtains no different response from the capital market. Our evidence suggests that the established CSR strategy influences the substantive response of Chinese firms to public emergencies, but their substantive response does not result in different reactions in the capital market.

Suggested Citation

  • Ma Zhong & Weiqi Zhao & Yasir Shahab, 2022. "The philanthropic response of substantive and symbolic corporate social responsibility strategies to COVID‐19 crisis: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(2), pages 339-355, March.
    • Handle: RePEc:wly:corsem:v:29:y:2022:i:2:p:339-355
    DOI: 10.1002/csr.2204
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.2204
    Download Restriction: no
    File URL: https://libkey.io/10.1002/csr.2204?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gao, Fox & Faff, Robert & Navissi, Farshid, 2012. "Corporate philanthropy: Insights from the 2008 Wenchuan Earthquake in China," Pacific-Basin Finance Journal, Elsevier, vol. 20(3), pages 363-377.
    2. Pascual Berrone & Andrea Fosfuri & Liliana Gelabert, 2017. "Does Greenwashing Pay Off? Understanding the Relationship Between Environmental Actions and Environmental Legitimacy," Journal of Business Ethics, Springer, vol. 144(2), pages 363-379, August.
    3. Wenjing Li & Ran Zhang, 2010. "Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence from China," Journal of Business Ethics, Springer, vol. 96(4), pages 631-645, November.
    4. Ming Jia & Zhe Zhang, 2013. "Critical Mass of Women on BODs, Multiple Identities, and Corporate Philanthropic Disaster Response: Evidence from Privately Owned Chinese Firms," Journal of Business Ethics, Springer, vol. 118(2), pages 303-317, December.
    5. Kent Walker & Fang Wan, 2012. "The Harm of Symbolic Actions and Green-Washing: Corporate Actions and Communications on Environmental Performance and Their Financial Implications," Journal of Business Ethics, Springer, vol. 109(2), pages 227-242, August.
    6. Olga Hawn & Ioannis Ioannou, 2016. "Mind the gap: The interplay between external and internal actions in the case of corporate social responsibility," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2569-2588, December.
    7. Francesco Testa & Olivier Boiral & Fabio Iraldo, 2018. "Internalization of Environmental Practices and Institutional Complexity: Can Stakeholders Pressures Encourage Greenwashing?," Journal of Business Ethics, Springer, vol. 147(2), pages 287-307, January.
    8. Béatrice Parguel & Florence Benoît-Moreau & Fabrice Larceneux, 2011. "How Sustainability Ratings Might Deter "Greenwashing": A Closer Look at Ethical Corporate Communication," Post-Print halshs-00561187, HAL.
    9. Jyoti Devi Mahadeo & Vanisha Oogarah-Hanuman & Teerooven Soobaroyen, 2011. "Changes in social and environmental reporting practices in an emerging economy (2004–2007): Exploring the relevance of stakeholder and legitimacy theories," Accounting Forum, Taylor & Francis Journals, vol. 35(3), pages 158-175, September.
    10. Carlos Noronha & Si Tou & M. I. Cynthia & Jenny J. Guan, 2013. "Corporate Social Responsibility Reporting in China: An Overview and Comparison with Major Trends," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(1), pages 29-42, January.
    11. Torelli, Riccardo & Balluchi, Federica & Lazzini, Arianna, 2019. "Greenwashing and Environmental Communication: Effects on Stakeholders’ Perceptions," OSF Preprints 97vxn, Center for Open Science.
    12. Kun Tracy Wang & Dejia Li, 2016. "Market Reactions to the First-Time Disclosure of Corporate Social Responsibility Reports: Evidence from China," Journal of Business Ethics, Springer, vol. 138(4), pages 661-682, November.
    13. Béatrice Parguel & Florence Benoît-Moreau & Fabrice Larceneux, 2011. "How Sustainability Ratings Might Deter ‘Greenwashing’: A Closer Look at Ethical Corporate Communication," Journal of Business Ethics, Springer, vol. 102(1), pages 15-28, August.
    14. Laura Schons & Maria Steinmeier, 2016. "Walk the Talk? How Symbolic and Substantive CSR Actions Affect Firm Performance Depending on Stakeholder Proximity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 23(6), pages 358-372, November.
    15. Estrin, Saul & Perotin, Virginie, 1991. "Does ownership always matter?," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 55-72, March.
    16. repec:dau:papers:123456789/4687 is not listed on IDEAS
    17. Ming Jia & Zhe Zhang, 2013. "Managerial Ownership and Corporate Social Performance: Evidence from Privately Owned Chinese Firms' Response to the Sichuan Earthquake," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(5), pages 257-274, September.
    18. Kong, Dongmin, 2012. "Does corporate social responsibility matter in the food industry? Evidence from a nature experiment in China," Food Policy, Elsevier, vol. 37(3), pages 323-334.
    19. Patten, Dennis M., 1992. "Intra-industry environmental disclosures in response to the Alaskan oil spill: A note on legitimacy theory," Accounting, Organizations and Society, Elsevier, vol. 17(5), pages 471-475, July.
    20. Ming Jia & Zhe Zhang, 2018. "The Role of Corporate Donations in Chinese Political Markets," Journal of Business Ethics, Springer, vol. 153(2), pages 519-545, December.
    21. Kangtao Ye & Ran Zhang, 2011. "Do Lenders Value Corporate Social Responsibility? Evidence from China," Journal of Business Ethics, Springer, vol. 104(2), pages 197-206, December.
    22. Liu, Xinghe & Wang, Enxian & Cai, Danting, 2019. "Green credit policy, property rights and debt financing: Quasi-natural experimental evidence from China," Finance Research Letters, Elsevier, vol. 29(C), pages 129-135.
    23. Yasir Shahab & Collins G. Ntim & Yugang Chen & Farid Ullah & Hai‐Xia Li & Zhiwei Ye, 2020. "Chief executive officer attributes, sustainable performance, environmental performance, and environmental reporting: New insights from upper echelons perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 1-16, January.
    24. Lin Liao & Guanting Chen & Dengjin Zheng, 2019. "Corporate social responsibility and financial fraud: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(5), pages 3133-3169, December.
    25. Zhang, Anming & Zhang, Yimin & Zhao, Ronald, 2001. "Impact of Ownership and Competition on the Productivity of Chinese Enterprises," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 327-346, June.
    26. Wenchuan Huang & Shouming Chen & Luu Thi Nguyen, 2020. "Corporate Social Responsibility and Organizational Resilience to COVID-19 Crisis: An Empirical Study of Chinese Firms," Sustainability, MDPI, vol. 12(21), pages 1-19, October.
    27. Lin, Karen Jingrong & Tan, Jinsong & Zhao, Liming & Karim, Khondkar, 2015. "In the name of charity: Political connections and strategic corporate social responsibility in a transition economy," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 327-346.
    28. Yasir Shahab & Collins G. Ntim & Ye Chengang & Farid Ullah & Samuel Fosu, 2018. "Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1635-1652, December.
    29. Xingqiang Du, 2015. "Is Corporate Philanthropy Used as Environmental Misconduct Dressing? Evidence from Chinese Family-Owned Firms," Journal of Business Ethics, Springer, vol. 129(2), pages 341-361, June.
    30. Lopin Kuo & Chin‐Chen Yeh & Hui‐Cheng Yu, 2012. "Disclosure of Corporate Social Responsibility and Environmental Management: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 19(5), pages 273-287, September.
    31. Rémi BAZILLIER & Julien Vauday, 2009. "The Greenwashing Machine, Is CSR more than communication ?," LEO Working Papers / DR LEO 1617, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    32. Wenqing Wu & Kexin Yu & Chien-Chi Chu & Jie Zhou & Hong Xu & Sang-Bing Tsai, 2018. "Diffusion of Corporate Philanthropy in Social and Political Network Environments: Evidence from China," Sustainability, MDPI, vol. 10(6), pages 1-17, June.
    33. Ma Zhong & Rong Xu & Xinyi Liao & Shuangli Zhang, 2019. "Do CSR Ratings Converge in China? A Comparison Between RKS and Hexun Scores," Sustainability, MDPI, vol. 11(14), pages 1-20, July.
    34. David G Hyatt & Nicholas Berente, 2017. "Substantive or Symbolic Environmental Strategies? Effects of External and Internal Normative Stakeholder Pressures," Business Strategy and the Environment, Wiley Blackwell, vol. 26(8), pages 1212-1234, December.
    35. Xingqiang Du & Wei Jian & Quan Zeng & Yingying Chang, 2018. "Do Auditors Applaud Corporate Environmental Performance? Evidence from China," Journal of Business Ethics, Springer, vol. 151(4), pages 1049-1080, September.
    36. Barry Ackers & Neil Stuart Eccles, 2015. "Mandatory corporate social responsibility assurance practices," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 28(4), pages 515-550, May.
    37. Peter Tashman & Valentina Marano & Tatiana Kostova, 2019. "Walking the walk or talking the talk? Corporate social responsibility decoupling in emerging market multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(2), pages 153-171, March.
    38. Arthur Gautier & Anne-Claire Pache, 2015. "Research on Corporate Philanthropy: A Review and Assessment," Journal of Business Ethics, Springer, vol. 126(3), pages 343-369, February.
    39. Christopher Marquis & Cuili Qian, 2014. "Corporate Social Responsibility Reporting in China: Symbol or Substance?," Organization Science, INFORMS, vol. 25(1), pages 127-148, February.
    40. Luis Perez-Batres & Jonathan Doh & Van Miller & Michael Pisani, 2012. "Stakeholder Pressures as Determinants of CSR Strategic Choice: Why do Firms Choose Symbolic Versus Substantive Self-Regulatory Codes of Conduct?," Journal of Business Ethics, Springer, vol. 110(2), pages 157-172, October.
    41. Stephen Brammer & Andrew Millington, 2008. "Does it pay to be different? An analysis of the relationship between corporate social and financial performance," Strategic Management Journal, Wiley Blackwell, vol. 29(12), pages 1325-1343, December.
    42. Xingqiang Du, 2015. "How the Market Values Greenwashing? Evidence from China," Journal of Business Ethics, Springer, vol. 128(3), pages 547-574, May.
    43. Ran Zhang & Zabihollah Rezaee & Jigao Zhu, 2010. "Corporate Philanthropic Disaster Response and Ownership Type: Evidence from Chinese Firms’ Response to the Sichuan Earthquake," Journal of Business Ethics, Springer, vol. 91(1), pages 51-63, January.
    44. Xing, Chao & Zhang, Yuming & Wang, Yuan, 2020. "Do Banks Value Green Management in China? The Perspective of the Green Credit Policy," Finance Research Letters, Elsevier, vol. 35(C).
    45. Jin-hui Luo & Yuangao Xiang & Ruichao Zhu, 2017. "Military top executives and corporate philanthropy: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 34(3), pages 725-755, September.
    46. Mahadeo, Jyoti Devi & Oogarah-Hanuman, Vanisha & Soobaroyen, Teerooven, 2011. "Changes in social and environmental reporting practices in an emerging economy (2004–2007): Exploring the relevance of stakeholder and legitimacy theories," Accounting forum, Elsevier, vol. 35(3), pages 158-175.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rupp, Anin & Limpaphayom, Piman, 2024. "Benefits of corporate social responsibility during a pandemic: Evidence from stock price reaction to COVID-19 related news," Research in International Business and Finance, Elsevier, vol. 68(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wei Li & Weining Li & Veikko Seppänen & Timo Koivumäki, 2023. "Effects of greenwashing on financial performance: Moderation through local environmental regulation and media coverage," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 820-841, January.
    2. Fan Xia & Jiaying Chen & Xue Yang & Xiaoliang Li & Bing Zhang, 2023. "Financial constraints and corporate greenwashing strategies in China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1770-1781, July.
    3. Douglas Cumming & Wenxuan Hou & Edward Lee, 2016. "Business Ethics and Finance in Greater China: Synthesis and Future Directions in Sustainability, CSR, and Fraud," Journal of Business Ethics, Springer, vol. 138(4), pages 601-626, November.
    4. Jyun‐Ying Fu, 2023. "Customer concentration and corporate charitable donations: Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 545-561, January.
    5. Shahab, Yasir & Wang, Peng & Gull, Ammar Ali & Chen, Yugang & Ntim, Collins G., 2023. "Social trust and environmental performance in China: Does state ownership matter?," Economic Modelling, Elsevier, vol. 124(C).
    6. Heng Liu & Jin-hui Luo & Victor Cui, 2018. "The Impact of Internationalization on Home Country Charitable Donation: Evidence from Chinese Firms," Management International Review, Springer, vol. 58(2), pages 313-335, April.
    7. Jun Chen & Wang Dong & Jamie Tong & Feida Zhang, 2018. "Corporate Philanthropy and Tunneling: Evidence from China," Journal of Business Ethics, Springer, vol. 150(1), pages 135-157, June.
    8. Frederik Plewnia & Edeltraud Guenther, 2017. "The benefits of doing good: a meta-analysis of corporate philanthropy business outcomes and its implications for management control," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(3), pages 347-376, October.
    9. Torelli, Riccardo & Balluchi, Federica & Lazzini, Arianna, 2019. "Greenwashing and Environmental Communication: Effects on Stakeholders’ Perceptions," OSF Preprints 97vxn, Center for Open Science.
    10. Patrick Velte, 2023. "Determinants and consequences of corporate social responsibility decoupling—Status quo and limitations of recent empirical quantitative research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 2695-2717, November.
    11. Teti, Emanuele & Etro, Leonardo L. & Pausini, Lorenzo, 2024. "Does greenwashing affect Company's stock Price? Evidence from Europe," International Review of Financial Analysis, Elsevier, vol. 93(C).
    12. Riccardo Torelli & Federica Balluchi & Arianna Lazzini, 2020. "Greenwashing and environmental communication: Effects on stakeholders' perceptions," Business Strategy and the Environment, Wiley Blackwell, vol. 29(2), pages 407-421, February.
    13. Hongjin Zhu & Yue Pan & Jiaping Qiu & Jinli Xiao, 2022. "Hometown Ties and Favoritism in Chinese Corporations: Evidence from CEO Dismissals and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 176(2), pages 283-310, March.
    14. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    15. Garanina, Tatiana & Kim, Oksana, 2023. "The relationship between CSR disclosure and accounting conservatism: The role of state ownership," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 50(C).
    16. Birindelli, Giuliana & Chiappini, Helen & Jalal, Raja Nabeel-Ud-Din, 2024. "Greenwashing, bank financial performance and the moderating role of gender diversity," Research in International Business and Finance, Elsevier, vol. 69(C).
    17. Yinglin Huang & Claude Francoeur & Stephen Brammer, 2022. "What drives and curbs brownwashing?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2518-2532, July.
    18. Huang, Kuo-Jui & Bui, Dien Giau & Hsu, Yuan-Teng & Lin, Chih-Yung, 2024. "The ESG washing in banks: Evidence from the syndicated loan market," Journal of International Money and Finance, Elsevier, vol. 142(C).
    19. Xingqiang Du & Yiqi Zhang & Shaojuan Lai & Hexin Tao, 2024. "How Do Auditors Value Hypocrisy? Evidence from China," Journal of Business Ethics, Springer, vol. 191(3), pages 501-533, May.
    20. Heli Wang & Ming Jia & Zhe Zhang, 2021. "Good Deeds Done in Silence: Stakeholder Management and Quiet Giving by Chinese Firms," Organization Science, INFORMS, vol. 32(3), pages 649-674, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:corsem:v:29:y:2022:i:2:p:339-355. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.