Ownership Reduction in State-Owned Enterprises and Corporate Social Responsibility: Perspective from Secondary Privatization in China

As an emerging economy, China modernized its economy via split-share structure reform. This reform changed the nature of ownership in state-owned enterprises (SOEs). Following this reform, we investigated the research question concerning how reductions in state ownership affect the corporate social responsibility (CSR) performance of listed firms. This study tests the hypotheses using data of Chinese listed firms between 2010 and 2015. Applying multiple regressions, we found a negative association between state reductions and CSR performance. We contribute to the existing literature by providing empirical evidence that those firms which reduce state holdings are not taking CSR activities seriously. Our study also sheds light on the worthiness and prominent status of large state owners of SOEs, as they are more likely to engage in social activities. This study provides fruitful implications for policy-makers and practitioners about state holdings, which may either hinder or enhance the corporate social performance