In recent years, businesses worldwide have shown a growing interest in adopting corporate social responsibility (CSR) practices. The driver of corporate CSR engagement has attracted widespread attention. This study seeks to examine how firms react to the CSR practices of their peers in China. The ordinary least square would be used to validate our hypothesis and the instrumental variable approach would be utilized to alleviate endogeneity threats. In addition, we propose two channels, named as market competition hypothesis and institutional pressure hypothesis to account for this peer effect. We plan to provide some empirical evidence to support both channels.
This study follows the empirical design outlined in the pre-registered report (Ding et al., 2024) to investigate how firms respond to the corporate social responsibility (CSR) practices of their peers and explores the potential mechanisms underlying these peer effects, focusing on market competition and institutional pressure. Our findings indicate that peer effects play a significant role in shaping CSR strategies in China. Smaller, younger, less mature firms and those with weaker CSR performance are more susceptible to the influence of their successful peers. This study contributes to the literature on CSR adoption in emerging markets and provides policy implications for optimizing CSR engagement.