Skip to main content

Advertisement

SpringerLink
Log in

Corporate Social Responsibility in China: A Corporate Governance Approach

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This study examines the effects of corporate governance mechanisms on CSR performance in an emerging economy, China. Because of the need of gaining legitimacy in the new institutional context, Chinese firms have to adopt global CSR practices in order to remain competitive. Using the corporate governance framework, this study examines how board composition, ownership, and TMT composition influence corporate social performance. The propositions are tested using data gathered from 471 firms in China. By and large, empirical findings supported the hypothesized relationships.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. We would like to thank one reviewer who specifically asked us to consider this effect. Since the regression results are the same, we do not present regressions results of this post hoc analysis. Statistical results, however, can be provided upon request.

References

  • Aguilera, R. V., Rupp, D. E., Williams, C. A., & Ganapathi, J. (2007). Putting the S back in corporate social responsibility: A multilevel theory of social change in organizations. Academy of Management Review, 32, 836–863.

    Article  Google Scholar 

  • Aguilera, R. V., Williams, C. A., Conley, J. M., & Rupp, D. E. (2006). Corporate governance and social responsibility: A comparative analysis of the UK and the US. Corporate Governance, 14, 147–158.

    Article  Google Scholar 

  • Arevado, J. A., & Aravind, D. (2011). Corporate social responsibility practices in India: Approach, drives, and barriers. Corporate Governance, 11, 399–414.

    Article  Google Scholar 

  • Bansal, P., & Gao, J. (2006). Building the future by looking to the past: Examining research published on organizations and environment. Organization and Environment, 19, 458–478.

    Article  Google Scholar 

  • Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97, 207–221.

    Article  Google Scholar 

  • Branzel, O., Ursacki-Bryant, T., Vertinsky, I., & Zhang, W. (2004). The formation of green strategies in Chinese firms: Matching corporate environmental responses and individual principles. Strategic Management Journal, 25, 1079–1095.

    Google Scholar 

  • Bruton, G. D., & Lau, C. M. (2008). Asian management research: Status today and future outlook. Journal of Management Studies, 45, 636–659.

    Article  Google Scholar 

  • Campbell, J. L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32, 946–967.

    Article  Google Scholar 

  • Child, J., Lu, Y., & Tsai, T. (2007). Institutional entrepreneurship in building and environmental protection system for the People’s Republic of China. Organization Studies, 28, 1103–1133.

    Article  Google Scholar 

  • Child, J., & Tsai, T. (2005). The dynamic between firms’ environmental strategies and institutional constraints in emerging economies: Evidence from China and Taiwan. Journal of Management Studies, 42, 95–125.

    Article  Google Scholar 

  • Coffey, B. S., & Wang, J. (1998). Board diversity and managerial control as predictors of corporate social performance. Journal of Business Ethics, 17, 1595–1603.

    Article  Google Scholar 

  • Cruz, L. B., & Boehe, D. M. (2010). How do leading retail MNCs leverage CSR globally? Insights from Brazil. Journal of Business Ethics, 91, 243–263.

    Article  Google Scholar 

  • Esa, E., & Mohd Ghazali, N. A. (2010). Corporate social responsibility and corporate governance in Malaysian government-linked companies. Corporate Governance, 12, 292–305.

    Article  Google Scholar 

  • Fan, D. K. K., Lau, C. M., & Wu, S. K. (2002). Corporate governance mechanisms. In A. S. Tsui & C. M. Lau (Eds.), The management of enterprises in the People’s Republic of China (pp. 211–240). Boston: Kluwer Academic Publishers.

    Chapter  Google Scholar 

  • Finkelstein, S., & Hambrick, D. (1996). Strategic leadership. Minneapolis, MN: West Publishing.

    Google Scholar 

  • Firth, M., Fung, P. M. Y., & Rui, O. M. (2007). Ownership, two-tier board structure, and the informativeness of earnings—Evidence from China. Journal of Business Research, 26, 463–496.

    Google Scholar 

  • Flammer, C. (2013). Corporate social responsibility and shareholder reaction: The environmental awareness of investors. Academy of Management Journal, 56, 758–781.

    Article  Google Scholar 

  • Friedman, A. L., & Miles, A. (2002). Developing stakeholder theory. Journal of Management Studies, 39, 1–21.

    Article  Google Scholar 

  • Gao, Y. (2009). Corporate social performance in China: Evidence from large companies. Journal of Business Ethics, 89, 23–35.

    Article  Google Scholar 

  • Hackston, D., & Milne, M. J. (1996). Some determinants of social and environmental disclosures in New Zealand companies. Accounting, Auditing & Accountability Journal, 9, 77–108.

    Article  Google Scholar 

  • Hillman, A. J., Keim, G. D., & Luce, R. A. (2001). Board composition and stakeholder performance: Do stakeholder directors make a difference? Business and Society, 40, 295–314.

    Article  Google Scholar 

  • Hoffman, A. J. (1999). Institutional evolution and change: Environmentalism and the U.S. chemical industry. Academy of Management Journal, 42, 351–371.

    Article  Google Scholar 

  • Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. (2000). Strategy in emerging economies. Academy of Management Journal, 43, 249–267.

    Article  Google Scholar 

  • Hu, H. W., Tam, O. K., & Tan, M. G. S. (2010). Internal governance mechanisms and firm performance in China. Asia Pacific Journal of Management, 27, 727–749.

    Article  Google Scholar 

  • Huang, C. J. (2010). Corporate governance, corporate social responsibility and corporate performance. Journal of Management & Organization, 16(5), 641–655.

    Article  Google Scholar 

  • Huse, M., Nielsen, S. T., & Hagen, I. M. (2009). Women and employee-elected board members, and their contributions to board control tasks. Journal of Business Ethics, 89, 581–597.

    Article  Google Scholar 

  • Ibrahim, N. A., & Angelidis, J. P. (1995). The corporate social responsiveness orientation of board members: Are there differences between inside and outside directors? Journal of Business Ethics, 14, 405–410.

    Article  Google Scholar 

  • Jamali, D., & Mirshak, R. (2007). Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of Business Ethics, 72, 243–262.

    Article  Google Scholar 

  • Jia, C., Ding, S., Li, Y., & Wu, Z. (2009). Fraud, enforcement action, and the role of corporate governance: Evidence from China. Journal of Business Ethics, 90, 561–576.

    Article  Google Scholar 

  • Jo, H., & Harjoto, M. A. (2012). The causal effect of corporate governance on corporate social responsibility. Journal of Business Ethics, 106, 53–72.

    Article  Google Scholar 

  • Johnson, R. A., & Greening, D. W. (1999). The effects of corporate governance and institutional ownership types on corporate social performance. Academy of Management Journal, 42, 564–576.

    Article  Google Scholar 

  • Kannabiran, G. (2009). Sustainable stakeholder engagement through innovative supply chain strategy: An exploratory study of an Indian organization. Asian Business & Management, 8, 205–223.

    Article  Google Scholar 

  • Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate governance and corporate social responsibility disclosures: Evidence from an emerging economy. Journal of Business Ethics, 114, 207–223.

    Article  Google Scholar 

  • Klotz, A. C., Hmieleski, K. M., Bradley, B. H., & Busenitz, L. W. (2014). New venture teams: A review of the literature and roadmap for future research. Journal of Management, 40, 226–255.

    Article  Google Scholar 

  • Krippendorff, K. (2004). Reliability in content analysis. Human Communication Research, 30, 411–433.

    Google Scholar 

  • La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. Journal of Finance, 54, 471–517.

    Article  Google Scholar 

  • Laplume, A. O., Sonpar, K., & Litz, R. A. (2008). Stakeholder theory: Reviewing a theory that moves us. Journal of Management, 34, 1152–1189.

    Article  Google Scholar 

  • Lau, C. M., Fan, D. K. K., Young, M. N., & Wu, S. K. (2007). Corporate governance effectiveness during institutional transition. International Business Review, 16, 425–448.

    Article  Google Scholar 

  • Lau, C. M., Tse, D. K., & Zhou, N. (2002). Institutional forces and organizational culture in China: Effects on change schemas, firm commitment and job satisfaction. Journal of International Business Studies, 33, 533–550.

    Article  Google Scholar 

  • Leung, M. (2014). A new age of protection for Chinese consumers. The Holmes Report. Retrieved May 20, 2014 from www.holmesreport.com/opinion-info/14937.

  • Lin, Z., Peng, M. W., Yang, H., & Sun, S. L. (2009). How do networks and learning drive M&As? An institutional comparison between China and the United States. Strategic Management Journal, 30, 1113–1132.

    Article  Google Scholar 

  • Lu, Y., & Tsai, T. (2006). The emergence of the environmental protection system in the transitional economy of China. International Studies of Management and Organization, 36, 73–103.

    Article  Google Scholar 

  • Lu, Y., & Yao, J. (2006). Impact of state ownership and control mechanisms on the performance of group affiliated companies in China. Asia Pacific Journal of Management, 23, 485–503.

    Article  Google Scholar 

  • Luo, X.R., Wang, D., & Zhang, J. (2013). State or market: Government regulation, institutional complexity, and CSR Reporting of Chinese Firms. Paper presented at The Inaugural Paul R. Lawrence Conference: Connecting Rigor and Relevance in Institutional Analysis, Harvard Business School.

  • Ma, X., Delios, A., & Lau, C. M. (2013). Beijing or Shanghai? The strategic location choice of large MNEs’ host-country headquarters in China. Journal of International Business Studies, 44, 953–961.

    Article  Google Scholar 

  • Margolis, J. D., & Walsh, J. P. (2003). Misery loves companies: Rethinking social initiatives by business. Administrative Science Quarterly, 48, 268–305.

    Article  Google Scholar 

  • Marquis, C., & Qian, C. (2014). Corporate social reporting in China: Symbol or substance. Organization Science, 25, 127–148.

    Article  Google Scholar 

  • Matten, D., & Moon, J. (2008). “Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33, 404–424.

    Article  Google Scholar 

  • Miles, S. (2012). Stakeholder: Essentially contested or just confused? Journal of Business Ethics, 108, 285–298.

    Article  Google Scholar 

  • Mohd Ghazali, N. A. (2007). Ownership structure and corporate social responsibility disclosure: Some Malaysian evidence. Corporate Governance, 7, 251–266.

    Article  Google Scholar 

  • Montiel, I. (2008). Corporate social responsibility and corporate sustainability. Organization and Environment, 21, 245–269.

    Article  Google Scholar 

  • Moon, J., & Shen, X. (2010). CSR in China research: Salience, focus and nature. Journal of Business Ethics, 94, 613–629.

    Article  Google Scholar 

  • Muller, A., & Kolk, A. (2008). CSR performance in emerging markets: Evidence from Mexico. Journal of Business Ethics, 85, 325–337.

    Article  Google Scholar 

  • Neubaum, D. O., & Zahra, S. A. (2006). Institutional ownership and corporate social performance: The moderating effects of investment horizons, activism, and coordination. Journal of Management, 32, 108–131.

    Article  Google Scholar 

  • Peng, M. W. (2004). Outside directors and firm performance during institutional transitions. Strategic Management Journal, 25, 453–471.

    Article  Google Scholar 

  • Prado-Lorenzo, J.-M., & Garcia-Sanchez, I.-M. (2010). The role of the board of directors in disseminating relevant information on greenhouse gases. Journal of Business Ethics, 97, 391–424.

    Article  Google Scholar 

  • Preuss, L., & Barkemeyer, R. (2011). CSR priorities of emerging economy firms: Is Russia a different shape of BRIC? Corporate Governance, 11, 371–385.

    Article  Google Scholar 

  • Priem, R. L., Lyon, D. W., & Dess, G. G. (1999). Inherent limitations of demographic proxies in top management team heterogeneity research. Journal of Management, 25, 935–953.

    Article  Google Scholar 

  • Rettab, B., Brik, A. B., & Mellahi, K. (2009). A study of management perceptions of the impact of corporate social responsibility on organizational performance in emerging economies: The case of Dubai. Journal of Business Ethics, 89, 371–390.

    Article  Google Scholar 

  • Reuber, A. R., & Fischer, E. (1997). The influence of the management team’s international experience on the internationalization behaviors of SMEs. Journal of International Business Studies, 28, 807–825.

    Article  Google Scholar 

  • Sambharya, R. B. (1996). Foreign experience of top management teams and international diversification strategies of U.S. multinational corporations. Strategic Management Journal, 17, 739–746.

    Article  Google Scholar 

  • Scott, W. R. (2002). The changing world of Chinese enterprises: An institutional perspective. In A. S. Tsui & C. M. Lau (Eds.), The management of enterprises in the People’s Republic of China (pp. 69–78). Boston: Kluwer Academic Publishers.

    Google Scholar 

  • See, G. K. H. (2008). Harmonious society and Chinese CSR: Is there really a link? Journal of Business Ethics, 89, 1–22.

    Article  Google Scholar 

  • Starik, M., & Marcus, A. (2000). Introduction to the special research forum on the management of organizations in the natural environment. Academy of Management Journal, 43, 539–546.

    Article  Google Scholar 

  • Surroca, J., Tribo, J. A., & Zahra, S. A. (2013). Stakeholder pressure on MNEs and the transfer of socially irresponsible practices to subsidiaries. Academy of Management Journal, 56, 549–572.

    Article  Google Scholar 

  • Tian, J. J., & Lau, C. M. (2001). Board composition, leadership structure and performance in Chinese shareholding companies. Asia Pacific Journal of Management, 18, 245–263.

    Article  Google Scholar 

  • Tsui, A. S., Schoonhoven, C. B., Meyer, M., Lau, C. M., & Milkovich, G. (2004). Organization and management in the midst of societal transformation: The People’s Republic of China. Organization Science, 15, 133–144.

    Article  Google Scholar 

  • Walsh, J. P., & Seward, J. K. (1990). On the efficiency of internal and external corporate control mechanisms. Academy of Management Review, 15, 421–458.

    Google Scholar 

  • Wang, J., & Coffey, B. S. (1992). Board composition and corporate philanthropy. Journal of Business Ethics, 11, 771–778.

    Article  Google Scholar 

  • Wang, M., Qiu, C., & Kong, D. (2011). Corporate social responsibility, investor behaviors, and stock market returns: Evidence from a natural experiment in China. Journal of Business Ethics, 101, 127–141.

    Article  Google Scholar 

  • Wei, L. Q., & Lau, C. M. (2012). Effective teamwork at the top: The evidence from China. International Journal of Human Resource Management, 23, 1853–1870.

    Article  Google Scholar 

  • Wei, S., Zhou, Q., & Lau, C.M. (2014). A survey of research on corporate governance in China. Management and Organization Review, forthcoming.

  • Wright, M., Filatotchev, I., Hoskisson, R. E., & Peng, M. W. (2005). Strategy research in emerging economies: Challenging the conventional wisdom. Journal of Management Studies, 42, 1–33.

    Article  Google Scholar 

  • Xia, J., Ma, X., Lu, J. W., & Yiu, D. W. (2014). Outward foreign direct investment by emerging market firms: A resource dependence logic. Strategic Management Journal, 35, 1343–1363.

    Article  Google Scholar 

  • Xu, D., & Meyer, K. E. (2013). Linking theory and context: ‘Strategy research in emerging economies’ after Wright et al. (2005). Journal of Management Studies, 50, 1322–1346.

    Google Scholar 

  • Xu, E., Yang, H., & Lu, Y. (2013). Organizational slack and corporate social performance: Empirical evidence from China’s public companies. Working paper, Renmin University, Beijing, China.

  • Yin, J., & Zhang, Y. (2012). Institutional dynamics and corporate social responsibility (CSR) in an emerging country context: Evidence from China. Journal of Business Ethics, 111, 301–316.

    Article  Google Scholar 

  • Young, M. N., Peng, M. W., Ahlstrom, D., Bruton, G. D., & Jiang, Y. (2008). Corporate governance in emerging economies: A review of the principal-principal perspective. Journal of Management Studies, 45, 196–220.

    Article  Google Scholar 

  • Zhang, J. Q., Zhu, H., & Ding, H. (2013). Board composition and corporate social responsibility: An empirical investigation in the post Sarbanes-Oxley era. Journal of Business Ethics, 114, 381–392.

    Article  Google Scholar 

  • Zu, L., & Song, L. (2008). Determinants of managerial values on corporate social responsibility: Evidence from China. Journal of Business Ethics, 88, 105–117.

    Article  Google Scholar 

Download references

Acknowledgment

This project is partially supported by a Grant (CUHK 448109) from Research Grant Council of the HK SAR.

Author information

Authors and Affiliations

  1. Department of Management, Chinese University of Hong Kong, Hong Kong, China

    ChungMing Lau & Yuan Lu

  2. Business School, Shantou University, Shantou, China

    Yuan Lu & Qiang Liang

Authors
  1. ChungMing Lau
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Yuan Lu
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Qiang Liang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to ChungMing Lau.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Lau, C., Lu, Y. & Liang, Q. Corporate Social Responsibility in China: A Corporate Governance Approach. J Bus Ethics 136, 73–87 (2016). https://doi.org/10.1007/s10551-014-2513-0

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-014-2513-0

Keywords

Search

Navigation