Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

4-2026

Abstract

How do firms respond when governments intervene to curb the negative externalities of business activities through ESG regulation? This dissertation addresses this central question in non-market strategy and CSR research by examining both genuine and opportunistic firm responses to regulatory mandates across two institutional contexts. Chapter 1 investigates the normative influence of mandatory CSR regulation. Exploiting India’s 2013 Companies Act, which requires qualifying firms to spend 2% of net income on CSR, I show that regulated firms significantly reduce subsequent irresponsible behaviors beyond what the regulation directly mandates. Additional analyses indicate that this reduction is not primarily driven by increased stakeholder monitoring or pressure, but by a normative shift induced by the mandate that leads firms to voluntarily constrain harmful behavior. Notably, this effect holds regardless of firms’ operational flexibility, suggesting a broad normative impact of regulation in reshaping corporate behavior. Chapter 2 examines opportunistic responses to regulatory shocks in China’s data-privacy regime. I distinguish between two strategies: arbitrage, in which firms increase compliance in the regulated domain while reducing engagement in related but less regulated areas, and decoupling, in which firms symbolically comply without substantive implementation. Studying the 2021 Personal Information Protection Law (a clear and strongly enforced regulation) and the 2019 Guideline (an ambiguous and weakly enforced precursor), I find that firms exhibit clear evidence of arbitrage following the Law, but are more likely to engage in decoupling rather than arbitrage after the Guideline. These findings provide empirical evidence of firms’ arbitrage behavior and emphasize the critical role of regulatory ambiguity in steering firms toward decoupling rather than arbitrage. Together, the dissertation advances non-market strategy theory by demonstrating that CSR mandates generate enduring normative effects, while regulatory shocks also prompt shortterm opportunistic trade-offs across social domains.

Degree Awarded

PhD in Business (S Mgmt & Org)

Discipline

Entrepreneurial and Small Business Operations | Strategic Management Policy

Supervisor(s)

WANG, Heli

First Page

1

Last Page

115

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

Download

Available for download on Thursday, June 17, 2027

Share

COinS