The US-China trade war: Impact on corporate social responsibility decoupling and corporate resilience

This study investigates the impact of the contentious trade war between the United States and China (US-China) on corporate social responsibility (CSR) decoupling. Using a comprehensive dataset and employing propensity score matching (PSM) and a staggered difference-in-differences (DID) model, we provide robust causal evidence that the trade war has intensified CSR decoupling. Uniquely, we uncover that this effect is driven primarily by heightened perceived trade uncertainty and intensified external legitimacy pressures, which induce firms to rely more on rhetorical CSR communication when financial and operational constraints limit substantive engagement. Managerial short-termism plays a secondary, reinforcing role. We further document that differentiation strategies, customer CSR expectations, and external monitoring constrain symbolic CSR responses, while financial constraints amplify them. Importantly, markets and customers respond to substantive CSR rather than optimistic disclosure tone: CSR decoupling increases firms' exposure to trade policy uncertainty and reduces sales, while improvements in actual CSR performance enhance resilience. Overall, the findings highlight the limits of symbolic CSR communication and underscore the strategic importance of authentic CSR investment in sustaining firm resilience under geopolitical shocks.