Competition Laws, Norms and Corporate Social Responsibility

40 Pages Posted: 21 May 2020 Last revised: 30 Jun 2020

See all articles by Wenzhi Ding

Wenzhi Ding

The University of Hong Kong - Faculty of Business and Economics

Ross Levine

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Wensi Xie

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Multiple version iconThere are 2 versions of this paper

Date Written: May 20, 2020

Abstract

Theory offers differing perspectives and predictions about the impact of product market competition on corporate social responsibility (CSR). Using firm-level data on CSR from 2002 through 2015 and panel data on competition laws in 48 countries, we discover that (1) intensifying competition induces firms to increase CSR activities, (2) the competition-CSR effect depends positively on society’s prioritization of the environment and treating others fairly, and (3) less financially-constrained firms boost CSR activities more in response to competition. The results are consistent with the stakeholder value maximization view that intensifying competition induces firms to invest in strengthening bonds with non-shareholder stakeholders (e.g., customers, workers, and suppliers).

Keywords: Competition Laws; Antitrust; Corporate Social Responsibility; Social Norms

JEL Classification: K21; L4; M14; G3; Z13

Suggested Citation

Ding, Wenzhi and Levine, Ross Eric and Lin, Chen and Xie, Wensi, Competition Laws, Norms and Corporate Social Responsibility (May 20, 2020). Available at SSRN: https://ssrn.com/abstract=3605990 or http://dx.doi.org/10.2139/ssrn.3605990

Wenzhi Ding

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong SAR
China

Ross Eric Levine (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Wensi Xie

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

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