Organizational Slack and Corporate Social Performance

Abstract

This study investigates how organizational slack affects corporate social performance (CSP). Our evidence, gathered from a sample of 1,299 Chinese listed companies, shows that only unabsorbed slack contributed to CSP and the positive relationship between unabsorbed slack and CSP is consistent with the same relationship of unabsorbed slack with corporate finance performance (CFP). Furthermore, absorbed slack was found to have a negative impact on CSP. Our hypotheses concerning the moderating effect of state ownership concentration on the relationship between slacks and CSP were not supported. Instead, the research finding indicates that the state ownership has a negative impact on the relationship between unabsorbed slack and CSP. This means the state ownership weakened unabsorbed slack's contribution to CSP.