Seeking Legitimacy through CSR Reporting: Evidence from China
Posted: 14 Aug 2012 Last revised: 12 Jun 2017
Date Written: September 28, 2016
Abstract
This study finds that Chinese firms that issue high-quality corporate social responsibility (CSR) reports are perceived as having greater legitimacy (operationalized by government endorsement and media endorsement) by the Chinese government and media. Chinese firms that issue higher quality CSR reports subsequently receive higher levels of government endorsement and media endorsement, which in turn lead to better financial performance. The positive relationship between the quality of a firm’s CSR disclosure and subsequent financial performance is mediated by the firm’s perceived level of legitimacy. The mediating role of government endorsement is stronger for firms based in underdeveloped regions.
Keywords: corporate social responsibility, disclosure quality, legitimacy, government subsidy, media coverage, financial performance
JEL Classification: M41 G14 G18 G30
Suggested Citation: Suggested Citation