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Lie of the Weak: Inconsistent Corporate Social Responsibility Activities of Chinese Zombie Firms

Author

Listed:
  • Shaozhen Han

    (Northwest University (Xi'an))

  • Guoming Li

    (JUFE - Jiangxi University of Finance and Economics)

  • Michel Lubrano

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, JUFE - Jiangxi University of Finance and Economics)

  • Zhou Xun

    (JUFE - Jiangxi University of Finance and Economics)

Abstract

This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms' corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies.

Suggested Citation

  • Shaozhen Han & Guoming Li & Michel Lubrano & Zhou Xun, 2020. "Lie of the Weak: Inconsistent Corporate Social Responsibility Activities of Chinese Zombie Firms," Working Papers halshs-02441264, HAL.
    • Handle: RePEc:hal:wpaper:halshs-02441264
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02441264
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    Cited by:

    1. Haiquan Wu & Wenli Liao & Zhifang Zhou & Yi Li, 2021. "Can Financial Constraints and Regulatory Distance Reduce Corporate Environmental Irresponsibility?," Sustainability, MDPI, vol. 13(23), pages 1-25, November.
    2. Figueira, Sandra & Gauthier, Caroline & Torres de Oliveira, Rui, 2023. "CSR and stakeholder salience in MNE subsidiaries in emerging markets," International Business Review, Elsevier, vol. 32(5).
    3. Naima Lassoued & Imen Khanchel, 2023. "Voluntary CSR disclosure and CEO narcissism: the moderating role of CEO duality and board gender diversity," Review of Managerial Science, Springer, vol. 17(3), pages 1075-1123, April.
    4. Simone Pizzi & Francesco Rosati & Andrea Venturelli, 2021. "The determinants of business contribution to the 2030 Agenda: Introducing the SDG Reporting Score," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 404-421, January.
    5. Wu, Qingyang & Chang, Siqi & Bai, Caiquan & Wei, Wendong, 2023. "How do zombie enterprises hinder climate change action plans in China?," Energy Economics, Elsevier, vol. 124(C).
    6. Arun Madanaguli & Shalini Srivastava & Alberto Ferraris & Amandeep Dhir, 2022. "Corporate social responsibility and sustainability in the tourism sector: A systematic literature review and future outlook," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(3), pages 447-461, June.
    7. Tomasz L. Nawrocki & Danuta Szwajca, 2021. "A Multidimensional Comparative Analysis of Involvement in CSR Activities of Energy Companies in the Context of Sustainable Development Challenges: Evidence from Poland," Energies, MDPI, vol. 14(15), pages 1-19, July.
    8. Xue-Zhou Zhao & Jun Chen & Feng-Wen Chen & Wei Wang & Senmao Xia, 2020. "How High-Polluting Firms Suffer from Being Distracted form Intended Purpose: A Corporate Social Responsibility Perspective," IJERPH, MDPI, vol. 17(24), pages 1-29, December.

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    Keywords

    corporate social responsibility; zombie firms; reports; disclosure; fulfillment; hypocrisy;
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