Prize or Price? Corporate Social Responsibility Commitment and Sales Performance in the Chinese Private Sector

Abstract

ABSTRACTStudies on the relationship between corporate social responsibilities (CSR) and firm performance have mostly looked at large public firms in developed countries. In this study, we analyze this relationship using a sample of privately owned firms in China, a developing economy context. We hypothesize a negative relationship between commitment to CSR and average sales growth for privately-owned firms operating in weak institutional environments. Further, we hypothesize that smaller firms will show a stronger negative relationship than larger firms. CEO survey data from a sample of 630 Chinese private firms confirm the moderating role of firm size. However, the results are not entirely as expected. The negative relationship is observed in small firms (100 or fewer employees), but the relationship is positive for large firms (greater than 1000 employees), consistent with the literature. We discuss implications for public policy and future research.