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Looking Backward and Forward: Political Links and Environmental Corporate Social Responsibility in China

Author

Listed:
  • Peng Zhou

    (Wuhan University)

  • Felix Arndt

    (De Montfort University)

  • Kun Jiang

    (University of Nottingham)

  • Weiqi Dai

    (Zhejiang University of Finance & Economics)

Abstract

This study aims to enrich our understanding of the relationship between political connections and the adoption of environmental corporate socially responsible (ECSR) investments. In addition to the individual-level political connections, i.e., entrepreneurs’ personal ties to government officials, we propose in China the creation of Communist Party of China (CPC) branches in privately owned firms serve as organizational and institutionalized dimensions of political connection building. Drawing on the social exchange theory, this paper details how CPC branches function in privately owned firms and how entrepreneurs are motivated by the reciprocal logic to engage in ECSR. We also supplement this main effect by examining the boundary conditions of it at the firm and regional level. Using a dataset with 17,690 firm observations in China, we find that the existence of CPC branches gives rise to the ECSR investments and the firm-level contingencies such as centralized governance and financial constraints, and the regional-level contingencies such as the development of the market system, are important moderators that shape the association of political links and ECSR investments. These findings have ample implications to understand the ECSR activities and extend social exchange theory beyond the individual level on which it is typically applied.

Suggested Citation

  • Peng Zhou & Felix Arndt & Kun Jiang & Weiqi Dai, 2021. "Looking Backward and Forward: Political Links and Environmental Corporate Social Responsibility in China," Journal of Business Ethics, Springer, vol. 169(4), pages 631-649, April.
    • Handle: RePEc:kap:jbuset:v:169:y:2021:i:4:d:10.1007_s10551-020-04495-4
    DOI: 10.1007/s10551-020-04495-4
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    References listed on IDEAS

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    7. Cheng, Zhiming, 2022. "Communist Party branch and labour rights: Evidence from Chinese entrepreneurs," China Economic Review, Elsevier, vol. 71(C).

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