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The spillover effect of a CSR mandate for China’s state-owned enterprises on mutual funds’ responsible investment

Author

Listed:
  • Zhuang, Zhuang
  • Cui, Wei
  • Wang, Ganghua

Abstract

Whether government-mandated corporate social responsibility (CSR) initiatives foster meaningful CSR practices is a widely debated issue. Using a difference-in-differences approach and a sample of 38,684 fund observations from 2010 to 2021, we provide empirical evidence that a CSR mandate targeting Chinese state-owned enterprises (SOEs) has generated a positive spillover effect—manifested in enhanced socially responsible investment by mutual funds. Specifically, mutual funds affiliated with controlling state-owned capital shareholders increased their responsible investment following the implementation of the mandate, compared to funds without such affiliations. We further find that this spillover effect is statistically significant only among funds dominated by retail investors. Our findings suggest that government-led CSR policies targeting SOEs can meaningfully influence the asset management sector by guiding investment decisions and promoting more socially responsible investing.

Suggested Citation

  • Zhuang, Zhuang & Cui, Wei & Wang, Ganghua, 2025. "The spillover effect of a CSR mandate for China’s state-owned enterprises on mutual funds’ responsible investment," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018690
    DOI: 10.1016/j.frl.2025.108615
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    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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