When A Political Sinner Does A Good Deed: The Role of Government Officials' Stigma Anxiety in Granting Political Access

Abstract

This study examines when firms with damaged political reputations – political officials' negative perceptions of a firm's capabilities and character – attempt to restore their reputations and regain political access through an essential form of Corporate Political Activities (CPA), Corporate Social Responsibility (CSR). We focus on the officials' incentives and introduce the concept of stigma anxiety, which refers to officials' concerns about being associated with reputationally damaged firms. Analysing 3531 Chinese firms from 2012 to 2020 in the context of China's anticorruption campaigns, we find that officials are less likely to grant political access to firms with damaged political reputations. However, CSR activities may mitigate these adverse effects. The effectiveness of CSR activities in regaining political access is further influenced by officials' stigma anxiety, shaped by three factors: controllability (the extent to which a stigmatized actor is perceived as responsible for the stigma), disruptiveness (the degree to which stigma is perceived as a threat to others), and visibility (the extent to which a stigma event stands out and attracts sustained attention). Our findings contribute to research on CPA, stigma, and CSR.