Corruption culture and corporate social responsibility: evidence from China

This paper investigates the impact of corruption culture on corporate social responsibility (CSR) of listed firms in China. Based on the theory of resource constraints, we find that firms located in regions with high levels of corruption culture have lower CSR, and this association still exists after using alternative measures of corruption culture and addressing potential endogeneity. Besides, we complement the literature by showing that the decrease in CSR is greater for firms with stronger political connections. Finally, we document that this negative relationship is mediated by the increase in rent-seeking and self-consumption. This study has important implications for countries that suffer from corruption and firms that intend to get rid of the influence of corruption.