Lie of the weak: Inconsistent corporate social responsibility activities of Chinese zombie firms. (20th April 2020)

• Record Type: Journal Article
• Authors: Han, Shaozhen; Li, Guoming; Lubrano, Michel; Xun, Zhou
• Is Part Of: Journal of cleaner production. Volume 253(2020)
• Publication Date: 2020-04-20
• Subjects: Corporate social responsibility -- Zombie firms -- Reports -- Disclosure -- Fulfillment -- Hypocrisy; Factory and trade waste -- Management -- Periodicals; Manufactures -- Environmental aspects -- Periodicals; Déchets industriels -- Gestion -- Périodiques; Usines -- Aspect de l'environnement -- Périodiques; 628.5
• DOI: 10.1016/j.jclepro.2019.119858
• Languages: English
• ISSNs: 0959-6526

Abstract

Abstract: This study investigates the differences between zombie firms and non-zombie firms in corporate social responsibility activities such as reporting, disclosure and fulfillment. Using Chinese listing company data collected from 2009 to 2016, we apply a three stage model with a double Heckman correction to deal with potential self-selection/endogeneity bias and to measure the differences consistently. We found that zombie firms are less willing to release standalone corporate social responsibility reports than non-zombie firms. Among companies that release standalone corporate social responsibility reports, the corporate social responsibility disclosure of zombie firms is at least not worse than non-zombie firms, but the corporate social responsibility fulfillment is significantly lower. We conclude from this gap between disclosure and fulfillment to the hypocritical behavior of zombie firms, due to the absence of control in corporate social responsibility. We suggest that government should enhance supervision over zombie firms' corporate social responsibility activities and subsidies towards them in order to lower their economic damage. Supplementary analyses provide some clues concerning the heterogeneity of inconsistence in term of external support characteristics, ownership and censorship which require further studies. Graphical abstract: Image 1 Highlights: Zombie status is negatively associated with the release of standalone CSR reports. Zombie firms' CSR disclosure is comparable to non-zombie firms. Zombie firms' CSR fulfillment is significantly lower than that of non-zombie firms. The CSR disclosure and fulfillment of zombie firms are inconsistent. Repeatable results if considering endogeneity or alternative definitions of variables.