The “return of the state” as an economic actor has left scholars at a lack of theoretical tools to capture the characteristics of state-dominated business systems. This is reflected in the fact that any type of state intervention in the economy is too easily qualified as a sign of “authoritarian capitalism,” which has led scholars to lump together countries as diverse as China, Singapore, and Norway under that heading. Rather than considering any type of state intervention in the economy as (...) authoritarian, we propose a more sophisticated conceptualization, which distinguishes two boundaries between the public and the private domains and conceives of the “return of the state” as the erosion of one or both of them. This conceptualization allows us to clearly distinguish a shift from an ideal-typical market-based “regulatory capitalism” to “state capitalism” or “authoritarian capitalism,” respectively. We use interview data with business leaders in an extreme case of the return of the state to identify the nature of the mechanisms by which an authoritarian government erodes these private-public divides. We argue that a focus on these constitutive mechanisms of the erosion of private-public divides allows us to define “authoritarian capitalism” in a way that makes it a useful tool to understand contexts beyond the Chinese case in which it first emerged. (shrink)

This study uses panel data to investigate the different roles of the Chinese government in influencing companies’ decision making about corporate environmental reporting (CER) via a two-stage process. The results show that the Chinese government appears to mainly influence the decision whether to disclose or not, but has limited influence on how much firms disclose. The results also show that the traditional model of authoritarian capitalism (under which state-owned enterprises [SOEs] are the major governance arrangement) is transforming into a new (...) model. In the new model of authoritarian capitalism, the Chinese government uses newer, more sophisticated tools to manage both state-owned and non–state-owned companies. In addition, these new governance arrangements appear to be more efficient than the traditional model. The findings of this study have implications for both the Chinese government and for Chinese companies, as well as making important contributions to the literature and knowledge of CER in China. (shrink)

This article introduces the concept of corporate social responsibility in the seemingly oxymoronic context of Chinese “authoritarian capitalism.” Following an introduction to the emergence of authoritarian capitalism, the article considers the emergence of CSR in China using Matten and Moon’s framework of explaining CSR development in terms both of a business system’s historic institutions and of the impacts of new institutionalism on corporations arising from societal pressures in their global and national environments. We find two forms of CSR in China, (...) reflecting the “multiplexity” of its business system: one in the mainly family-owned small and medium-sized enterprise sector reflecting concern with local reputation, and another in the corporate, mainly state-owned enterprise sector, reflecting global and national societal expectations. We investigate the dynamics of CSR in China through the interplay of the global and national societal pressures and mediating and even leading roles played by the State and the Party. We consider the conceptual integrity and practical prospects for “state-led society-driven” CSR and future research opportunities, including those opened up by the three contributing articles to this special issue. (shrink)

This paper analyzes the determinants of corporate reputation within a sample of large UK companies drawn from a diverse range of industries. We pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders. Our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries. Given that reputational indices tend to reflect the financial performance of organizations above (...) other factors (Fryxell, G. E. and J. Wang: 1994, Journal of Management 20, 1–14) and that elements of the literature emphasise that discretionary aspects of social responsibility, including corporate donations, may not be in the financial interests of organizations (e.g. Friedman, M.: 1970, “The Social Responsibility of Business is to Increase its Profits”, New York Times Magazine, September 13), this is a significant finding. It suggests that philanthropic expenditures may play a significant role in stakeholder management and may, in particular, lead to stakeholders holding more positive impressions of philanthropic corporations. (shrink)

The state is a key driver of corporate social responsibility across developed and developing countries. But the existing research provides comparatively little knowledge about: (1) how companies strategically manage the relationship with the state through corporate social responsibility (CSR); (2) how this strategy takes shape under the influence of political institutions. Understanding these questions captures a realistic picture of how a company applies CSR to interacting with the state, particularly in countries where the state relationship is critical to the business (...) operation. This article draws on political legitimacy as a useful concept to directly address both strategic and politically embedded natures of CSR. This work extends the currently under-specified political implication of the strategic view of CSR and provides fresh insights to the political legitimacy research by specifying a typology of CSR-based legitimacy strategies and its contextual variation. China and Russia are the focal settings. A qualitative analysis of business—state interaction cases is done using a database that contains the majority of CSR reports published in Chinese and Russian as the end of 2009. As a result, this paper identifies four qualitatively different types of CSR-based political legitimacy strategies and reveals how the adoption of these strategies differs across Chinese companies, Russian companies, and multinational corporations. (shrink)

China’s historical mixed-ownership reform (the Reform) has prioritized enhancing the efficiency and financial performance of its large state-owned enterprises (SOEs) through introduction of partial private-sector equity ownership. However, the presence of a significant gap between China’s private enterprises’ corporate social responsibility (CSR) practices and those of its SOEs suggests potential for Reform-related ownership changes to negatively impact economy-wide CSR performance. We therefore examine the Reform’s impact on private acquirer firms’ CSR practices. We use a proprietary data set of firms listed (...) on the Shanghai and Shenzhen Stock Exchanges, covering the 2011–2015 period. Our findings identify that private firms can enhance their economic and political status through acquiring equity in state-controlled or SOEs and, following this, improve their CSR practices. Our findings have policy implications in the context of the world’s largest emerging market and, more generally, for SOE ownership reform in emerging and transition economies. (shrink)

The role of governments in business and society research remains underexplored. The generally accepted principle of voluntarism, which frames responsible business conduct as an unregulated subject under managerial discretion, accounts for this gap. Paradoxically, there are sufficient acknowledgments in academia and practice on different roles of governments. The present article identifies three broad topics for research, addressing the paradox between the principle of voluntarism and the role of governments in B&S, the boundaries of governments and business in their contribution to (...) B&S issues, and the mechanisms of government intervention that affect corporate social performance. The authors approach the first topic with a literature review of 703 articles marked with the term “government” from five journals in the field between 1982 and 2011. This study indicates that the principle of voluntarism remains, despite the broad variety of research related to the role of government in B&S. In addition, the identified content provides deeper insight into the mechanisms of government intervention and on the boundaries of governments in the B&S discourse. This article then provides a summary of the other three research articles included in this special research forum, with a contribution oriented toward the latter two research avenues posited. (shrink)

What signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility practices? We argue that in emerging economies, firms that adopt CSR practices positively signal investors that their firms have superior capabilities for filling institutional voids. From an institution-based view, we hypothesize that the institutional environment moderates the signaling effect of CSR on a firm’s financial performance. Based on a sample of firms from ten Asian emerging economies, we find a positive relationship between CSR practices (...) and financial performance. This positive relationship is stronger in the less developed capital market than in the more developed one. The financial benefits of CSR practices are also more salient in the low information diffusion market than in the high one. We emphasize that signaling theory and the institution-based view can jointly contribute to the CSR literature. (shrink)

In recent years, firms have greatly increased the amount of resources allocated to activities classified as Corporate Social Responsibility (CSR). While an increase in CSR expenditure may be consistent with firm value maximization if it is a response to changes in stakeholders' preferences, we argue that a firm's insiders (managers and large blockholders) may seek to overinvest in CSR for their private benefit to the extent that doing so improves their reputations as good global citizens and has a "warm-glow" effect. (...) We test this hypothesis by investigating the relation between firms' CSR ratings and their ownership and capital structures. Employing a unique data set that categorizes the largest 3000 U. S. corporations as either socially responsible (SR) or socially irresponsible (SI), we find that on average, insiders' ownership and leverage are negatively related to the firm's social rating, while institutional ownership is uncorrelated with it. Assuming that higher CSR ratings is associated with higher CSR expenditure level, these results support our hypothesis that insiders induce firms to over-invest in CSR when they bear little of the cost of doing so. (shrink)

This article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms’ ownership type using a unique dataset of listed firms in China, where state ownership is still prevalent. Based on the data of Chinese firms’ response to the 2008 Sichuan earthquake, we find that the extent of corporate contributions for state-owned firms following this disaster is less than that for private firms. State-owned firms are also less likely to respond in␣this disaster compared (...) to private firms. The results also␣reveal that firm size, profitability, geography, cash resource available, and leverage affect firms’ philanthropic disaster response behavior in China. (shrink)

In this study we seek to determine whether catastrophic events lead to corporate charitable giving unrelated to levels of firm profitability. We examine the issue relative to the corporate philanthropic response to the 9/11 terrorist attacks of 2001. Based on a sample of 489 Fortune 500 companies, we find that differences in the extent of corporate contributions following 9/11 are positively and significantly associated with differences in firms' profitability. Further, while the degree of connection to the catastrophic event led to (...) higher levels of giving in comparison to the contributions of less connected firms, differences in the extent of philanthropy are still␣related to short-term profitability for the more connected firms. The study thus provides evidence suggesting that even in the wake of catastrophic events, corporate philanthropic giving is constrained by economic concerns. (shrink)

This paper investigates whether philanthropic giving decisions and amount of charitable giving are related to firms’ political connections and ownership type. To this end, Chinese firms listed on either the Shenzhen or Shanghai stock exchange between 2004 and 2011 are examined, where government interference in the business sector is prevalent, state ownership structure is dominant, and corporate political connections prevail. Our analyses show a significant and positive relationship between political connections and the likelihood and extent of firm contributions; a significant (...) and negative relationship between state ownership and extent of firm contributions; and a stronger relationship between political connections and corporate philanthropy in non-state-owned firms. These findings with regard to the relationship between corporate giving, political connections, and ownership type have important implications for understanding corporate giving behavior in China and in emerging markets in general. (shrink)

This article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms' ownership type using a unique dataset of listed firms in China, where state ownership is still prevalent. Based on the data of Chinese firms' response to the 2008 Sichuan earthquake, we find that the extent of corporate contributions for state-owned firms following this disaster is less than that for private firms. State-owned firms are also less likely to respond in this disaster (...) compared to private firms. The results also reveal that firm size, profitability, geography, cash resource available, and leverage affect firms' philanthropic disaster response behavior in China. (shrink)