Informal institutions and corporate social responsibility: a Confucian culture perspective

Few papers have studied the impact of informal institutions on the fulfilment of corporate social responsibility (CSR). Using a sample of Chinese listed firms from 2011 to 2018, this paper investigates the impact of informal institutions, proxied as the Confucian culture, on CSR. The results show that the Confucian culture is beneficial to promoting the fulfilment of CSR, and this positive impact is unchanged after robust tests. Confucian culture will affect CSR through corporate reputation and industry peer effects. Through a series of heterogeneity tests, we found the following results: (1) The promoting effect of Confucian culture mainly exists in non-state-owned enterprises and small and medium-sized enterprises. (2) In areas with imperfect formal institutions and underdeveloped economies, the informal institutions represented by Confucian culture can play a complementary role to formal institutions, assisting in promoting CSR. (3) The impact of foreign culture will weaken the positive role of Confucian culture in fulfilling CSR. Based on the introduction of Confucian culture, our findings clarify and highlight the role of informal institutions on CSR.