Organizational slack and corporate social performance: Empirical evidence from China’s public firms

Abstract

This study investigates how organizational slack affects corporate social performance (CSP). Based on a sample of 1,299 Chinese listed firms, our results show that only unabsorbed slack contributes to CSP and the positive relationship between unabsorbed slack and CSP is consistent with the relationship between unabsorbed slack and corporate financial performance (CFP). Our results also show that absorbed slack generates a negative impact on CSP. Furthermore, our findings indicate that state ownership has a negative impact on the relationship between unabsorbed slack and CSP. This finding illustrates that state ownership weakens unabsorbed slack’s contribution to CSP.