State Capitalism and Corporate Social Responsibility

Abstract

Abstract In this chapter, we review the literature to examine the role of the Chinese state in shaping corporate social responsibility (CSR) activities. We start by taking stock of the variety of channels employed by the Chinese party-state to influence the adoption and diffusion of CSR among Chinese firms. Second, we examine how the state utilizes different institutional linkages between the state and firms to influence CSR in connected firms. These linkages include government’s shareholding in firms and political connections between firms and governmental agencies, and how they differ in transmitting the state’s influence regarding CSR. Third, we delve into the state’s bureaucratic fragmentation and dual goals (economic and noneconomic), which affect the effectiveness of the state’s CSR policy implementation. Fourth, we analyze the circumstances under which the civil society’s demands of CSR may undermine or enhance the state’s influence on CSR. Lastly, we explore the strategic benefits firms can obtain from the state through their CSR activities. Overall, our review unveils the complexity and evolution of the state’s influence on CSR in China and points to promising directions for future research.