Economic policy uncertainty and imitation behaviors of corporate social responsibility practices: Evidence from China

Publication Type

Journal Article

Publication Date

10-2023

Abstract

In this paper, we examine whether firms facing higher economic policy uncertainty (EPU) are more likely to show similar corporate social responsibility (CSR) practices compared with their peer firms. Drawing upon institutional theory, in response to uncertainty under complex circumstances, managers tend to imitate peer firms' strategic actions to acquire legitimacy. Consistent with our theoretical expectations, we find that EPU increases the likelihood that a focal firm will show CSR practices similar to its peer firms. Such a likelihood is amplified for firms that (1) bear more negative media coverage, (2) have higher industry competition intensity, (3) belong to heavy-polluting industries, and (4) for the first-time disclosures. Our results hold when we employ a series of endogeneity tests and robustness checks.

Keywords

Corporate social responsibility, Document similarity, Economic policy uncertainty, Institutional theory

Discipline

Asian Studies | Business Law, Public Responsibility, and Ethics | Finance and Financial Management | Industrial Organization

Research Areas

Information Systems and Management

Publication

International Review of Financial Analysis

Volume

89

First Page

1

Last Page

15

ISSN

1057-5219

Identifier

10.1016/j.irfa.2023.102753

Publisher

Elsevier

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1016/j.irfa.2023.102753

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