Social Responsibility, Social Capital, and Corporate Competitive Advantage in Transitional China

Abstract

In this paper we analyze the impact of social responsibility on corporate sustainable value via the strategic role of corporate social capital in a transitional context. Using survey data of Chinese companies, we empirically examine the theoretical relationship. We find that corporate social responsibility has no direct association with corporate financial performance or organizational reputation. However, corporate social capital can very much improve on the impact of social responsibility on the corporate social performance. Specifically, social responsibility of a firm with higher social capital positively contributes much more to organization reputation than that with lower social capital. There are also evidences hinting that the motivation of a firm in a transitional context to conduct social responsibility program is to response to the demands of government mainly according to its social capital, and this is different from that of a firm in western social context. We present this strategic implication that the interaction between social responsibility and social capital will better the corporate sustainable advantage.