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Would you call it overconfidence? Inclusive finance and social responsibility of small and medium-sized enterprises in China

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  • Xue Li
  • Lanshan Gui

Abstract

The relationship between inclusive finance (IFI) and corporate governance has gained increasing academic attention due to its theoretical and practical significance, particularly in the context of emerging economies. Grounded in stakeholder and institutional theory, this study examines how IFI influences the corporate social responsibility (CSR) engagement of micro, small, and medium-sized enterprises (MSMEs) using a dataset of 6,288 small firms across 252 Chinese cities. Further analysis reveals that intellectual property protection, firms’ viability, and market competitive environment through IFI are the potential channels. These effects vary by firm size, developmental stage, location, and the development level of city. To ensure robustness, multiple-estimation techniques and potential endogeneity concerns are considered. The results suggest that beyond regulatory compliance, MSMEs may adopt CSR as a strategic response to financial accessibility and competitive pressures. By integrating IFI into the discourse on MSME sustainability, this study contributes to both theoretical and policy discussions, offering insights for policymakers and business leaders in emerging economies.

Suggested Citation

  • Xue Li & Lanshan Gui, 2025. "Would you call it overconfidence? Inclusive finance and social responsibility of small and medium-sized enterprises in China," Applied Economics, Taylor & Francis Journals, vol. 57(28), pages 4062-4081, June.
    • Handle: RePEc:taf:applec:v:57:y:2025:i:28:p:4062-4081
    DOI: 10.1080/00036846.2025.2484032
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