The Corporate Economic Influence and Corporate Social Responsibility: Evidence from China

Abstract

This paper uses a panel threshold model to examine the relationship between corporate social responsibility (CSR, hereafter) and enterprises’ economic influence on regional gross domestic product (GDP, hereafter) and employment. We find that there is a threshold effect between CSR and enterprises’ economic influence on regional GDP and employment in different regimes of local GDP and unemployment rates. When local GDP is low, the relationship between CSR and enterprises’ economic influence on regional GDP is significantly negative; however, when local GDP is high, the relationship between the two factors is significantly positive. Meanwhile, firms employing more staff do less CSR when the local unemployment rate is higher. Furthermore, in terms of different government types, the relationship between CSR and corporate influence on regional GDP is negative in predatory and collusive governments, but not in market-leading governments, and the relationship between CSR and corporate influence on regional employment seems insignificant. The findings imply that local leading enterprises exert influence on the social responsibility rules stipulated by local governments by decreasing or increasing regional GDP and regional employment.