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Corruption and corporate social responsibility: Evidence from a quasi-natural experiment in China⋆

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  • Kong, Dongmin
  • Shu, Yijia
  • Wang, Yanan

Abstract

The study examines the causal effect of corruption on corporate social responsibility (CSR) in the Chinese context. Using China’s anti-corruption campaign as a quasi-natural experiment, we employ a difference-in-difference design to show the following: (1) The anti-corruption campaign substantially improves CSR performance. (2) Plausible mechanisms are financial constraints and analyst coverage, where financial slacks and analyst coverage of affected firms increase after the campaign. (3) The anti-corruption campaign exhibits more significant effects on CSR in firms with better governance and domestic firms. Overall, this study evaluates the impact of anti-corruption on CSR and provides policy implications for regulators to enhance CSR performance.

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  • Kong, Dongmin & Shu, Yijia & Wang, Yanan, 2021. "Corruption and corporate social responsibility: Evidence from a quasi-natural experiment in China⋆," Journal of Asian Economics, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:asieco:v:75:y:2021:i:c:s1049007821000464
    DOI: 10.1016/j.asieco.2021.101317
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