A Review of Corporate Social Responsibility Decoupling and Its Impact: Evidence from China

Abstract

CSR decoupling refers to the misalignment between a company’s stated CSR policies and its actual practices, resulting in issues like diminished financial performance and heightened risk. While initially explored in developed economies such as the US, recent research has shifted focus towards developing nations like China. However, a comprehensive review of CSR decoupling literature in the Chinese market remains lacking. Previous research typically examines the decoupling phenomenon at the general level of CSR, without considering the distinct impacts of its three key components: environmental, social, and governance pillars. Our study seeks to address this gap by conducting a comprehensive review of CSR decoupling covering 82 related studies, specifically analyzing its environmental, social, and governance dimensions within the context of China. Our findings offer valuable insights for both future research on CSR decoupling in China and policymaking. Firstly, there is a pressing need to prioritize investigations into means–ends decoupling, given the constraints on policy–practice decoupling imposed by stringent regulations. Secondly, the role of government policies in shaping CSR practices is pivotal. Future research could delve into the impacts of policy shocks using quasi-experimental designs. Thirdly, emerging issues like workplace safety, the executive pay gap, and gender diversity are gaining prominence in China’s CSR landscape. Lastly, the dominance of state ownership presents significant challenges to corporate governance, warranting further exploration.