Corporate Social Responsibility and Firm Survival: Evidence from Chinese Listed Firms

This study examines the effect of corporate social responsibility (CSR) on Chinese firms' probability of survival using 2426 firm-year observations over the period 2011-2019. We find evidence that CSR has a positive effect on firms' survival prospects. This effect is stronger for state-owned enterprises (SOEs). The result is robust to an instrumental variable approach and several quasi-natural experiments. We further decompose CSR into its components, and we identify a more prominent positive effect of the CSR environmental component for SOEs. SOEs generally appear to have an easier path to survival when engaged in CSR activities. The results remain valid when accounting for a set of robustness checks related to alternative CSR measures, financial constraints, provincial diversity, exogenous shocks, and placebo tests. Overall, this study provides evidence that CSR activities improve firms' probability of survival in a government intervention setting.