How should mining firms invest in the multidimensions of corporate social responsibility? Evidence from China

Abstract

Although it is widely accepted that mining firms should be involved in corporate social responsibility (CSR) activities, we do notice that CSR engagement is relatively high-cost, especially considering the fact that mineral products have suffered from an extended period of lower and volatile commodity prices. Therefore, we explore how mining firms “do well by doing good”. Using a sample of listed mining firms in China over the period covering 2008 to 2017 and fuzzy-set/qualitative comparative analysis, we explore which configurations of CSR dimensions result in different levels of return on equity (ROE). Our empirical results provide compelling evidence that 1) although 34% of listed mining firms have published CSR reports, their CSR level has more room for improvement; 2) mining firms do more in product dimensions than other CSR dimensions; 3) it is more likely to affect profitability by investing in the multidimensions of CSR in a combined way, and four patterns result in high ROE, while one pattern leads to not-high ROE; and 4) doing more in community and CSR governance is more likely to enhance profitability, while in diversity and products, it does the opposite.