Abstract
This study examines the effects of executives' political mindsets on their Corporate Social Responsibility (CSR), which has corporate and societal implications. We focus on the Chinese market, where political connections shape business activities. We find that executives with a promotion or ideology-oriented mindset issue more substantive CSR reports than their peers.
However, only executives with ideology-oriented mindsets contribute to society, whereas promotion-oriented executives are associated with lower societal impact. This "CSR decoupling" also manifests itself in firms' CSR activities. Chairpersons with political connections are more likely to pursue financial performance at the expense of societal contributions than their unconnected peers. In contrast, chairpersons with party membership are less likely to do so than their unaffiliated peers. Lastly, this paper shows that executives' political perception affects the relationship between political mindset and CSR.
However, only executives with ideology-oriented mindsets contribute to society, whereas promotion-oriented executives are associated with lower societal impact. This "CSR decoupling" also manifests itself in firms' CSR activities. Chairpersons with political connections are more likely to pursue financial performance at the expense of societal contributions than their unconnected peers. In contrast, chairpersons with party membership are less likely to do so than their unaffiliated peers. Lastly, this paper shows that executives' political perception affects the relationship between political mindset and CSR.
Original language | English |
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Pages (from-to) | 524-548 |
Number of pages | 25 |
Journal | European Journal of Finance |
Volume | 30 |
Issue number | 5 |
Early online date | 11 May 2023 |
DOIs | |
Publication status | Published - 2024 |
Bibliographical note
This work was supported by National Natural Science Foundation of China: [Grant Number grant number 72202184]; Guanghua Talent Project of Southwestern University of Finance and Economics: [Grant Number NA].Keywords
- Corporate governance
- Political mindset
- Corporate social responsibility
- Decoupling