Government Subsidies and Corporate Social Responsibility Performance-- Evidence from Chinese Listed

Abstract

In this study, we investigate whether government subsidies are a determinant of corporate social responsibility (CSR). Based on legitimacy theory, we explore the impact of government subsidies on CSR. We also explore how corporate state ownership and regional institutional development affect the impact of government subsidies on CSR. Using a sample of firms listed on the Shanghai and Shenzhen Stock Exchanges between 2009 and 2016, we find that government subsidies have a positive influence on CSR and that state ownership weakens the effect of government subsidies on CSR performance while regional institutional development strengthens this effect. We discuss the implications of our findings for legitimacy theory and CSR research.