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Being Good When Being International in an Emerging Economy: The Case of China

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Abstract

The importance imposed on corporate social responsibility (CSR) is greater in developed economies than in emerging markets. The pressures from various stakeholder groups on the CSR are expected to have substantial spillover impact on companies domiciled in emerging economies that obtain revenues from companies in developed economies. Based on the data from 1,330 listed companies in China, the largest emerging economy in the world, this study provides evidence that the CSR performance of China firms is positively related to the degree of their internationalization, and such a positive association is less pronounced for state-owned enterprises. Our findings support the hypothesis that internationalized companies in emerging economies are motivated to improve their CSR practices to address concerns from their importers or outsourcers in developed economies.

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Notes

  1. Lococo (2012).

  2. Since 1998, the Shanghai and Shenzhen Stock Exchanges have classified some listed firms as special treatment firms. A firm is labeled special treatment if there is an abnormality in its financial status, along with other factors that result in difficulty in judging company prospects.

  3. In China, most listed companies do not disclose their adverting expenses. However, given that advertising expenses are typically a stable proportion of sales expenses, we use the ratio of sales expenses to total sales as a proxy for advertising intensity.

  4. China Securities Regulatory Commission issued the Industry Classification Guide of Listed Companies in April 2001, which categorizes companies into 12 industries.

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Acknowledgments

We thank three anonymous reviewers, Thomas Maak (the editor), Allan Chan (Guest editor), Ira Horowitz, the participants at the 4th World Business Ethics Forum in Hong Kong for their helpful comments. Tan gratefully acknowledge financial support from the Strategic Development Fund of the Hong Kong Baptist University, while Kong gratefully acknowledges funding from the National Natural Science Foundation of China (Project No.: 71173078; 71372130). The authors alone are responsible for the paper.

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Authors and Affiliations

  1. Hong Kong Institute of Education, Tai Po, Hong Kong

    Yan-Leung Cheung

  2. Huazhong University of Science and Technology, Wuhan, China

    Dongmin Kong

  3. School of Business, Hong Kong Baptist University, Kowloon Tong, Hong Kong

    Weiqiang Tan & Wenming Wang

Authors
  1. Yan-Leung Cheung
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  2. Dongmin Kong
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  3. Weiqiang Tan
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  4. Wenming Wang
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Corresponding author

Correspondence to Weiqiang Tan.

Appendix 1: CSR Score Rating Criteria

Appendix 1: CSR Score Rating Criteria

This table reports the score rating criteria of our CSR measure. The score rating criteria are from the social responsibility ranking of Chinese firms by SNAI. The SNAI formulates CSR scores according to the SA8000 standard issued by the SAI.

1. Environmental problems: curbing polluted environment, recycling waste that are harmful to the environment, producing products that promote environmental protection, and using alternative methods to control pollution.

2. Energy savings: recycling old and waste materials, reducing energy consumption; continuously improving the energy saving properties of products, and promoting research on energy savings.

3. Employee problems: caring for the health and safety of employees, employee training, reemployment of laid-off employees, reasonable arrangement of working time and positions, establishment and enforcement of standards on overtime, no employment of child labor, and provision of employee benefits.

4. Employment and fair promotion: employment and promotion of minorities, females, handicapped persons, and veterans.

5. Social problems: donations to communities, education institutes, medical activities, arts, sports, and disaster areas as well as attention to public safety and opening company facilities to the public.

6. Consumer problems: on-time delivery, improvements in product quality, safe use of products, improved customer service, and attention to the interests of specific consumers.

7. Other stakeholders: respect to the interests of creditors, consideration on the interests of suppliers.

8. Abidance to law and business ethics: prevention of corruption, extortion, and bribery as well as operating faithfully and lawfully.

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Cheung, YL., Kong, D., Tan, W. et al. Being Good When Being International in an Emerging Economy: The Case of China. J Bus Ethics 130, 805–817 (2015). https://doi.org/10.1007/s10551-014-2268-7

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