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Does social security policy matter for corporate social responsibility? Evidence from a quasi-natural experiment in China

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  • Lv, Wendai
  • Ma, Wenhao
  • Yang, Xiandong

Abstract

The factors driving corporate social responsibility (CSR) have emerged as an important research area. Firm characteristics and external environments affect CSR, but the influence of social security seems inconclusive. Using firm-level data of listed companies in China for 2009–2017, we examine the relationship between CSR and social security policy. Our results suggest that firms strengthen social responsibility after social security policies are implemented, with the motivation to reduce the wage premiums caused by the policy. We conduct a series of robustness tests to corroborate our findings. Furthermore, we show that the relationship between social security policy and CSR is moderated by ownership, financing constraints, and cost transfer capability. Overall, this paper is the first to prove that social security policy can simultaneously increase labor protection and CSR.

Suggested Citation

  • Lv, Wendai & Ma, Wenhao & Yang, Xiandong, 2022. "Does social security policy matter for corporate social responsibility? Evidence from a quasi-natural experiment in China," Economic Modelling, Elsevier, vol. 116(C).
    • Handle: RePEc:eee:ecmode:v:116:y:2022:i:c:s0264999322002486
    DOI: 10.1016/j.econmod.2022.106008
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