Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment
Corporate involvement with social responsibility (CSR) is a voluntary practice. However, governments have recently adopted a more supportive stance by providing research and development support and tax exemptions. Therefore, this study examines the role of government subsidies (Sub) in CSR, consider...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2022-04-01
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| Series: | Journal of Innovation & Knowledge |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2444569X22000294 |
| _version_ | 1818206532242767872 |
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| author | Duan Wenqi Adnan Khurshid Abdur Rauf Adrian Cantemir Calin |
| author_facet | Duan Wenqi Adnan Khurshid Abdur Rauf Adrian Cantemir Calin |
| author_sort | Duan Wenqi |
| collection | DOAJ |
| description | Corporate involvement with social responsibility (CSR) is a voluntary practice. However, governments have recently adopted a more supportive stance by providing research and development support and tax exemptions. Therefore, this study examines the role of government subsidies (Sub) in CSR, considering the amount and number of subsidies and the type of industry in a competitive business environment. The paper establishes theoretical linkages through the construction of an oligopolistic market model of private enterprises based on industrial organisation theory's structure–conduct–performance (SCP) paradigm. Moreover, our study tests the empirical relationship using a dataset of 100 listed companies in Pakistan observed from 2011 to 2019 using robust standard error methodologies and a fixed effects IV estimator. The results show that government subsidies significantly promote private enterprises to actively fulfil their social responsibilities, and product market competition plays an intermediary role that endorses the theoretical proposition. This effect is visible at all stages of the enterprise's life cycle. Additionally, the relationship is more prominent in the case of low- and medium-sized government subsidies, competitive industries, and firms with no political connections. The results further reveal that product market competition is the primary channel through which government subsidies influence CSR. Concurrently, optimising the allocation of financial resources has specific significance. |
| first_indexed | 2024-12-12T04:14:31Z |
| format | Article |
| id | doaj.art-b68bdaad19cc436298c36c12e6a6cce0 |
| institution | Directory Open Access Journal |
| issn | 2444-569X |
| language | English |
| last_indexed | 2024-12-12T04:14:31Z |
| publishDate | 2022-04-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Journal of Innovation & Knowledge |
| spelling | doaj.art-b68bdaad19cc436298c36c12e6a6cce02022-12-22T00:38:30ZengElsevierJournal of Innovation & Knowledge2444-569X2022-04-0172100189Government subsidies’ influence on corporate social responsibility of private firms in a competitive environmentDuan Wenqi0Adnan Khurshid1Abdur Rauf2Adrian Cantemir Calin3School of Business, Taizhou University, Taizhou, Zhejiang, 318000, China; Corresponding authors.; School of Economics and Management, Zhejiang Normal University, Jinhua, Zhejiang, 321004, ChinaSchool of Economics and Management, Zhejiang Normal University, Jinhua, Zhejiang, 321004, China; Corresponding authors.Department of Economics, University of Science and Technology Bannu, Bannu, PakistanBucharest University of Economic Studies, Romanian, Institute for Economic Forecasting, Romanian Academy, RomaniaCorporate involvement with social responsibility (CSR) is a voluntary practice. However, governments have recently adopted a more supportive stance by providing research and development support and tax exemptions. Therefore, this study examines the role of government subsidies (Sub) in CSR, considering the amount and number of subsidies and the type of industry in a competitive business environment. The paper establishes theoretical linkages through the construction of an oligopolistic market model of private enterprises based on industrial organisation theory's structure–conduct–performance (SCP) paradigm. Moreover, our study tests the empirical relationship using a dataset of 100 listed companies in Pakistan observed from 2011 to 2019 using robust standard error methodologies and a fixed effects IV estimator. The results show that government subsidies significantly promote private enterprises to actively fulfil their social responsibilities, and product market competition plays an intermediary role that endorses the theoretical proposition. This effect is visible at all stages of the enterprise's life cycle. Additionally, the relationship is more prominent in the case of low- and medium-sized government subsidies, competitive industries, and firms with no political connections. The results further reveal that product market competition is the primary channel through which government subsidies influence CSR. Concurrently, optimising the allocation of financial resources has specific significance.http://www.sciencedirect.com/science/article/pii/S2444569X22000294M14H25L13 |
| spellingShingle | Duan Wenqi Adnan Khurshid Abdur Rauf Adrian Cantemir Calin Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment Journal of Innovation & Knowledge M14 H25 L13 |
| title | Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment |
| title_full | Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment |
| title_fullStr | Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment |
| title_full_unstemmed | Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment |
| title_short | Government subsidies’ influence on corporate social responsibility of private firms in a competitive environment |
| title_sort | government subsidies influence on corporate social responsibility of private firms in a competitive environment |
| topic | M14 H25 L13 |
| url | http://www.sciencedirect.com/science/article/pii/S2444569X22000294 |
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