Strategic responses of stigmatized Chinese manufacturing firms to formal and informal environmental regulative pressures through enhanced corporate social responsibility effort

Jia Xu, Jiuchang Wei, Haipeng Chen

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Linking two forms of regulative pressures to different motivations for firms' strategic choices, we propose that stigmatized firms' effort to enhance their corporate social responsibility (CSR) reflects legitimacy considerations when faced with formal regulative pressures, but efficiency considerations when faced with informal regulative pressures. We provide empirical support for our theory by investigating publicly listed Chinese manufacturing firms' environmental CSR performance after they are stigmatized for environmental pollution. Our data strongly support our predictions. Stigmatized firms show a lower CSR effort when formal regulative pressure is low and they can easily shun responsibility for polluting the environment, whereas they show a higher CSR effort when informal regulative pressure is high and they cannot easily shun responsibility for the pollution. These findings highlight the unique insight that can be gained by studying stigmatized firms' reactions to different types of regulative pressures as a function of responsibility dilution in an emerging economy.

Original languageEnglish
Pages (from-to)1235-1260
Number of pages26
JournalCorporate Social Responsibility and Environmental Management
Volume26
Issue number6
DOIs
StatePublished - Nov 1 2019

Bibliographical note

Funding Information:
This research was funded by the National Natural Science Foundation of China (71828102 and 71522013). This paper has not been submitted to any other journal or publication.

Publisher Copyright:
© 2019 John Wiley & Sons, Ltd and ERP Environment

Keywords

  • CSR
  • corporate stigma
  • environment protection
  • regulative pressures
  • stigma dilution

ASJC Scopus subject areas

  • Development
  • Strategy and Management
  • Management, Monitoring, Policy and Law

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