Network Location And Corporate Social Responsibility

In the era of pursuing high-quality economic development and common prosperity for the people,the social performance of enterprises is increasingly becoming a fundamental element of sustainable economic and social development.Unfortunately,enterprises often neglect the fulfilment of their social responsibility in the process of development.Therefore,improving corporate social responsibility performance has become an urgent and important practical issue.Corporate social responsibility performance is determined by a variety of factors,not only depending on their human and financial capital but also on their management capacity and willingness to fulfil their obligations.Some studies have pointed out that the existence of social networks can make up for the shortcomings of the formal system and improve corporate social responsibility performance,but these studies have focused more on the network of independent directors or the interpersonal network of CEOs and directors.With the promotion of mixed ownership reforms,cross-shareholding behaviour among companies has become increasingly common and cross-shareholding networks have become an important social network influencing corporate behaviour in China.However,little research has been conducted on whether cross-shareholding networks can influence the social responsibility performance of Chinese companies,especially in the context of the current pursuit of high-quality economic development,and it is of great theoretical and practical significance to explore how cross-shareholding networks affect corporate social responsibility to guide enterprises to achieve high-quality development.This paper focuses on the phenomenon of cross-shareholding among listed enterprises and uses firm-level panel data from 2010-2021 to construct a cross-shareholding network and examine the impact and mechanism of network location characteristics on CSR.The study finds that the improvement in the location characteristics of companies in crossshareholding networks has a positive impact on the level of CSR.The positive impact of cross-shareholding networks is heterogeneous in terms of firm size,governance structure and geographic location,and is more significant for larger firms with CEO duality and those located in the eastern region.Further mechanism tests suggest that the impact of a firm’s location in a cross-shareholding network on CSR performance is positive by improving the quality of internal controls and alleviating the financing constraints of the firm,which in turn has a positive impact on CSR performance.In conclusion,the findings of this paper suggest that the more important a firm’s position in a cross-shareholding network is,the more it tends to fulfil its social responsibility.Compared to the existing literature,the contribution of this paper is in two aspects.First,it enriches the research on the factors influencing corporate social responsibility.Unlike the existing literature which explores the influencing factors of CSR in terms of geographical location,nature of ownership,CEO and board characteristics,this paper explores the influence and transmission mechanism of the social network formed by cross-shareholding on CSR,enriching and broadening the content of CSR research.Secondly,it enriches the research on cross-shareholding.Existing research has failed to pay attention to the impact of cross-shareholding on corporate social benefits.By constructing a cross-shareholding network,this paper finds that the position of a company in the cross-shareholding network has a positive impact on the social responsibility performance of the company,providing new micro evidence of the impact of cross-shareholding in the field of corporate reform.