How does the absorbed slack impact corporate social responsibility? Exploring the nonlinear effect and condition in China

Abstract

This study investigates the impact of absorbed slack on corporate social responsibility (CSR) and the moderating effects of political and equity relationships on the main effect. Multiple regression analysis was used on 2175 samples of 435 publicly listed Chinese firms for the period 2012 to 2016 to empirically test the influence of absorbed slack on CSR. The empirical results show that the impact of absorbed slack on CSR is inverted U-shaped. Furthermore, when compared to companies with low political connections, the inverted U-shape between the absorbed slack and CSR in highly politically connected companies is more pronounced. Compared to companies with low ownership concentrations, the inverted U-shape between absorbed slack and CSR in high ownership concentration enterprises is more pronounced.