Political Embeddedness or World Cultural Pressure? Explaining Corporate Social Responsibility Reporting in China, 2006–20201

Abstract

How do organizations respond to institutional complexity arising out of both domestic and global forces? We focus on corporate social responsibility (CSR) reporting in China and empirically test the effects of both domestic institutional connections and world cultural linkage. We analyze the adoption of CSR reports compiled by 3,757 listed firms in China from 2006 to 2020 via a discrete‐time event history framework. We seek to explain the adoption of two different forms of CSR reports: those explicitly referencing global models and those written under the guidance of government agencies. To what extent is the adoption of CSR reports attributable to political signaling from the party‐government nexus or world culture pressures? Do the influences operate similarly for the reports based on national governmental directives and those more explicitly linked to world society? Our findings conclude that the firms’ global connectedness better explains the adoption of Global Reporting Initiative‐based reports. In contrast, their linkage to domestic political processes, especially at the central level, is well attuned to the versions promoted by government agencies.