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Seeing is believing? The impact of air pollution on corporate social responsibility
Author(s) -
Tan Zhidong,
Tan Jianhua,
Chan Kam C.
Publication year - 2020
Publication title -
corporate social responsibility and environmental management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.519
H-Index - 73
eISSN - 1535-3966
pISSN - 1535-3958
DOI - 10.1002/csr.2068
Subject(s) - corporate social responsibility , endogeneity , air pollution , business , government (linguistics) , pollution , social responsibility , salient , natural resource economics , public relations , economics , political science , chemistry , organic chemistry , ecology , linguistics , philosophy , law , econometrics , biology
We study the impact of air pollution in the city in which a firm is located on its corporate social responsibility (CSR) activities. Our hypothesis suggests that when managers are personally exposed to bad air pollution, they feel the pain and push their firms to engage in more CSR activities. Leveraging recent announcements regarding air pollution in Chinese cities, we find evidence consistent with our “seeing is believing” hypothesis. The findings are robust to alternative metrics of CSR and air pollution and after accounting for endogeneity. Additional analysis suggests that the impact of air pollution on CSR is more salient for firms with disproportionately older, female, and highly educated managers as well as when the local city government has more stable resources or when media coverage of air pollution increases.