Transformations  in
Business & Economics

DOES ADMISSION TO THE RICH LIST DRIVE LISTED COMPANIES IMPROVE CORPORATE SOCIAL RESPONSIBILITY?²
Rangkun Qi, Baosheng Zhang

ABSTRACT. Corporate social responsibility (CSR) has become a global hot topic in recent years. However, few studies have paid close attention to the effect of admission into the rich list of actual controllers on CSR fulfillment. Admission to that list is a "natural experiment" and attracts media attention to the listed rich and the companies they control. Consequently, that inclusion influences the personal and corporate reputation of the listed rich and their companies. To explore the effect of admission to the rich list on CSR and the related action mechanism, data regarding admission to the list and the social responsibility of listed companies actually controlled by the listed rich from 2010-2017 were selected. The PSM-DID (Propensity Score Matching and Differences-in-Differences) method and mediating effect model were used to empirically test the effect of admission to rich list on the CSR fulfillment of companies on the list. Moreover, the mediating effects of media attention and corporate reputation were investigated. Results show that compared to companies excluded from the list, companies on the list had significantly higher CSR fulfillment. Admission to the rich list is a high trigger for media attention to the listed rich and their companies. Both positive and negative media reports place external reputation pressure on listed companies. Media attention exerts external supervisory functions for listed companies and forces those companies to attach greater importance to CSR fulfillment. The halo of the listed rich and the media attention influence their personal reputations and those of the listed companies. To maintain their own reputation and corporate interests, the listed companies are willing to actively fulfill CSR. The conclusions support the notion of the media exerting the external supervisory functions of public opinion for companies on the precondition of respecting objective fact and constructing a reasonable corporate reputation transmission mechanism for enhanced corporate internal governance .

KEYWORDS:  rich list, corporate social responsibility (CSR), media attention, corporate reputation.

JEL classification:  M12, M14, G30.

² Acknowledgment: This study was supported by Program for Innovative Research Team (in Science and Technology) in University of Henan Province (No. 19IRTSTHN016) and Major project of applied research of philosophy and social sciences in colleges and universities of Henan Province (No. 2019-YYZD-13)