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Political Uncertainty and Corporate Social Responsibility in a Transition Economy

Political Uncertainty and Corporate Social Responsibility in a Transition Economy We examine the influence of political uncertainty on the corporate social responsibility (CSR) of local firms in China. Political uncertainty refers to government officials' turnover. We find that these firms significantly increase their CSR activities when city government officials are changed or replaced. We also find that political uncertainty increases firms' attention to employee responsibilities, supply chain responsibilities, and environmental responsibilities. In addition, the turnover of government officials increases CSR activities due to the reduction or loss of political connections. The anti‐corruption campaign has also strengthened the influence of political uncertainty on CSR. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Journal of Financial Studies Wiley

Political Uncertainty and Corporate Social Responsibility in a Transition Economy

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Publisher
Wiley
Copyright
© 2022 Korean Securities Association
ISSN
2041-9945
eISSN
2041-6156
DOI
10.1111/ajfs.12393
Publisher site
See Article on Publisher Site

Abstract

We examine the influence of political uncertainty on the corporate social responsibility (CSR) of local firms in China. Political uncertainty refers to government officials' turnover. We find that these firms significantly increase their CSR activities when city government officials are changed or replaced. We also find that political uncertainty increases firms' attention to employee responsibilities, supply chain responsibilities, and environmental responsibilities. In addition, the turnover of government officials increases CSR activities due to the reduction or loss of political connections. The anti‐corruption campaign has also strengthened the influence of political uncertainty on CSR.

Journal

Asia-Pacific Journal of Financial Studies – Wiley

Published: Oct 1, 2022

Keywords: Political uncertainty; Corporate social responsibility; City government officials; Chinese firms; M1; M14

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