The impacts of non-regulatory pressures on corporate social responsibility reporting patterns in an emerging market: Evidence from China

Abstract

Previous research has predominantly focused on how regulations, as formal institutional pressure, drive corporate social responsibility (CSR) reporting in China. Less attention has been given to the co-existence of other institutional pressures and how firms respond. This study constructs a CSR reporting pattern taxonomy, categorising firms' reporting patterns based on CSR report issuance and score improvement pace. We utilise a panel dataset of Chinese-listed firms from 2006 to 2019 to examine the impact of institutional pressures on changes in these firms' CSR reporting patterns. Respecting CSR's contextual nature and promoting a responsible reporting environment that respects all stakeholders, this study places a special emphasis on the effects of non-regulatory pressures in China, which are often eclipsed by the more dominant regulatory pressures. Results show that analysts' coverage and recommendations, as well as industry and geographic peer effects, are effective pressures on firms' reporting patterns, upgrading from non-reporting to decoupled to convergent reporting. Industry peer effects promote upgrading reporting patterns from non-reporting to convergent reporting, while geographic peer effects move reporting patterns from non-reporting to decoupled reporting. Regulatory pressure is proven to promote both patterns equally, contradicting the ‘policy–practice’ decoupling predicted by institutional theory. The study draws on evidence from an emerging market where regulatory pressure is a dominant force, contributing to our understanding of firm response heterogeneity to the institutional environment. We call for the integration of global CSR ratings with contextual institutional characteristics. Practical implications for firms and policymakers are also discussed.