State or Market: Institutional Complexity and CSR Reporting of
Chinese Firms
ABSTRACT
While research on the disclosure of CSR (corporate social responsibility) recognizes the
influence of broader institutional pressures, less attention has been given to the co-existence of
conflicting pressures and non-mature market contexts. We develop a framework wherein CSR
reporting is viewed as an organizational response to institutional complexity and apply it to the
adoption and quality of CSR reporting by publicly listed firms in China after the central
government-controlled stock exchanges issued guidelines on CSR reporting. A longitudinal
analysis between 2008 and 2011 largely supports our framework. As a baseline, institutional
linkage to central government and high visibility enhanced a firm’s compliance with the
normative pressure from the central government’s guidelines. In addition, institutional pressures
from geographic communities conditioned firm response: while the development of provincial
market institutions facilitated CSR reporting, provincial government’s priority on GDP growth
inhibited it. Moreover, in provinces with conflicting pressures from government’s growth priority
and market institutions, firms with links to central government and high visibility exhibited a form
of decoupling: they had higher adoption rates but their CSR reports were of reduced quality
premium. Our study advances research on how organizations respond to multiple and
conflicting institutional pressures and the literature on the disclosure of CSR.