Corporate Social Responsibility in China : Law & the Business Case for Strategic CSR

Research on the drivers of corporate social responsibility (CSR) has long focused on the business case; that is, how market pressure can shift the dominant norms of business culture toward acceptance of CSR practices as part of the way business should operate. Drawing on institutional theory, prior work has also observed that variations in firm CSR practice are a function of their local and global institutional contexts that result from interactions among market institutions, formal legal institutions, and informal norms. This article examines the empirical evidence in support of the business case for CSR among Chinese firms to determine whether market forces are likely to drive the norms of Chinese business culture toward an embedded, or strategic, CSR. It then explicitly examines how legal institutions undergird (or undermine) the business case for CSR in China. This effort contributes new insights to the comparative literature on the business case for CSR by moving beyond studies of the business case in Western markets that have often assumed the existence of strong legal institutions as a backdrop to the business case. This article concludes that recent efforts by emerging market governments to advance CSR by harnessing market forces will only succeed if they are accompanied by continued efforts to strengthen legal institutions. In the People's Republic of China (PRC) context, equally important is commitment by local officials and state agencies as primary stakeholders of Chinese firms.