Assessment of local officials and government‐initiated CSR: Evidence from targeted poverty alleviation in China

Abstract

AbstractThis paper explores whether the assessment of local government officials affects firm participation in targeted poverty alleviation. Using a sample of Chinese A‐share listed companies in the Midwest from 2016 to 2019, the results show that the greater the importance of officials' poverty alleviation assessment, the higher the participation of firms in precise poverty alleviation. State‐owned enterprises (SOEs) contribute more to the reduction of destitution than private enterprises. We further find that local SOEs' participation in precision poverty alleviation enhances the likelihood of executive promotion, while private enterprises' participation in precision poverty alleviation increases government subsidies and reduces the cost of debt financing. These findings imply that the evaluation mechanisms of Chinese officials can effectively promote enterprises fulfilling social responsibilities.