Ownership and corporate social performance in China: Why geographic remoteness matters

Abstract

This article addresses the relationships between ownership, geographic remoteness and corporate social performance in China. Building on institutional theory and instrumental stakeholder theory, we develop a novel theoretical framework that explains corporate social performance of Chinese state-owned enterprises and non-state-owned enterprises. We argue that geographic remoteness from urban centers affects them differently, leading to higher social performance in urban areas mainly for state-owned enterprises, and higher social performance in remote rural areas for non-state-owned enterprises. This is because they access critical resources in distinct ways, which can shape their incentives to engage in social activities. Our study contributes to the state-of-the-art corporate social performance literature by reconciling existing controversies around the relationship between state ownership and corporate social performance. In addition, we advance scientific knowledge on the thus far under-researched role of geography in corporate social performance. Our research has important managerial implications for corporate responsibility in China and, potentially, for other emerging economies with similar (state) ownership and unbalanced regional development characteristics.