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Does privatization matter for corporate social responsibility? Evidence from China

Author

Listed:
  • Farman Ullah Khan

    (Xi’an Jiaotong University)

  • Junrui Zhang

    (Xi’an Jiaotong University)

  • Nanyan Dong

    (Xi’an Jiaotong University)

  • Muhammad Usman

    (Nanjing Audit University)

  • Sajid Ullah

    (Xi’an University of Technology)

  • Shahid Ali

    (Xi’an Jiaotong University)

Abstract

This paper examines the link between privatization of state ownership and corporate social responsibility performance. Using a sample of Chinese listed companies between 2010 and 2015, we find evidence that privatization is negatively associated with firms’ social performance but this negative relationship is weaker for firms that have politically connected board members. These results suggest that the firm’s likelihood to engage in social activities results primarily from political connections and from significant government control over the firm’s decisions, as such firms are subject to higher pressure than other firms are. Moreover, our findings have important implications for policymakers in understanding companies’ social behavior in an emerging market.

Suggested Citation

  • Farman Ullah Khan & Junrui Zhang & Nanyan Dong & Muhammad Usman & Sajid Ullah & Shahid Ali, 2021. "Does privatization matter for corporate social responsibility? Evidence from China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 497-515, September.
    • Handle: RePEc:spr:eurasi:v:11:y:2021:i:3:d:10.1007_s40821-020-00154-w
    DOI: 10.1007/s40821-020-00154-w
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    4. Xiaoyu Li & Jiawei Tang & Chao Feng & Yexiao Chen, 2023. "Can Government Environmental Auditing Help to Improve Environmental Quality? Evidence from China," IJERPH, MDPI, vol. 20(4), pages 1-21, February.

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