Is corporate social responsibility value relevant? Evidence from a quasi-natural experiment of anti-corruption campaign

Abstract Leveraging China’s 2013 anti-corruption campaign (the Campaign) as a quasi-natural experiment and a difference-in-differences (DID) research design, we examine which of the three motives (value relevancy, risk management, or altruism) better explain a firm’s corporate social responsibility (CSR) activities. Our findings suggest that, after the Campaign and conditional on the level of firm corruption-related expenses, firms generally engage in more CSR, which supports the value relevance motive of CSR. Additional analyses suggest that the positive impact of the Campaign on CSR is more salient when: 1) the Campaign is effective in the province in which a firm is located; 2) the financialization level of a province in which a firm is located is high; 3) firms have more political connections interruption in the Campaign; 4) firms have high operating risk; 5) firms are more capable of conducting CSR activities; or 6) the extent of firms’ corporate governance is excellent.