Abstract
The study investigates the effect of tournament incentives on corporate social responsibility (CSR). Using data from Chinese listed firms during the period from 2010 to 2019, we find that tournament incentives can encourage corporate executives to improve their CSR performance. The results also reveal that this positive association between tournament incentives and CSR is more pronounced in firms that have a tradition of recruiting a successor CEO from within the organization. However, in companies with CEOs recruited internally, shareholder monitoring can restrain the tournament effect on CSR. In addition, we also find that tournament incentives are more pronounced in State Owned Enterprises. The results remain robust to a batch of endogeneity tests to address potential self-selection bias and reverse causality between tournament incentives and CSR.
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