Research On Industry Tournament Incentives Driven And Long-term Performance Of Corporate Social Irresponsibility:Theory And Empirical

Since the reform and opening up,China's corporate economy has made great progress.However,in this process,incidents of corporate non-responsibility to society also emerge endlessly.For example,the melamine milk powder incident in 2008,the clenbuterol incident in 2011,the problematic vaccine incident in 2018,and the false medical advertisement incident in 2021.Corporate social responsibility behavior is a kind of behavior that is beneficial to society and strives to exceed its direct interests and legal obligations.In contrast,corporate social irresponsibility refers to companies that engage in illegal or legal but unethical behaviors,which ignores the overall interests of society,or chooses the interests of a single stakeholder without considering the interests of other stakeholders.Therefore,corporate social irresponsibility cannot be simply equated with the opposite of corporate social responsibility behavior(that is,the company does not engage in social responsibility behavior).More precisely,corporate social irresponsibility and corporate social responsibility behavior are significantly different in theoretical concepts,subject to different dynamics,and will bring different economic consequences.For this reason,the real high-level corporate social performance should include two aspects at the same time: first,actively "avoiding bad”,that is,actively avoiding corporate social responsibility;second,actively "doing good",that is,actively implementing corporate social responsibility.So far,although domestic scholars have achieved a series of inspiring research results on the driving factors of corporate social responsibility behavior and its economic consequences.However,it should be noted that very few research theories analyze and empirically explore the driving factors and economic consequences of China's corporate social irresponsibility,which is seriously inconsistent with the large number of corporate social irresponsibility in Chinese practice.This research attempts to deepen the theoretical understanding and predictability of China's corporate social irresponsibility through the tentative discussion of the following two sub-researches,so as to provide useful guidance for corporate shareholders and relevant regulatory authorities to prevent and control corporate social irresponsibility.Specifically,in the first sub-study,this research aims to answer the following important theoretical and practical questions: whether,how and when industry tournament incentives affect corporate social irresponsibility.This research focuses on industry competition incentives(that is,the gap between CEO compensation and the highest CEO compensation in the industry).The practice drive lies in the fact that although the CEO labor market is far from effective in terms of supply and demand,in recent years,it has become more compensation transparent.For example,JIEMIAN News produced by Shanghai Poster Industry Group has been publishing China's A-share listed firms' executive compensation lists for many years.As a consequence,industry tournament incentives have become a management reality that CEOs are familiar with.The theoretical drive lies in the fact that the internal tournament incentives formed by the salary comparison between the executives within the company,and the industry tournament incentives formed by the salary comparison between the CEOs of the industry,all will significantly affect the strategic decision-making of the company.However,the literature on the drivers of corporate social irresponsibility currently only pays attention to the former but ignores the latter.Based on tournament theory and principal-agent theory,and taking Chinese listed companies from 2003 to 2019 as the research object,this research has obtained the following research conclusions: First,industry tournament incentives will cause the CEO to sacrifice the long-term shareholder value maximization for personal gain(for example,higher industry status and industry visibility),thereby promoting corporate social irresponsibility.Second,managerial myopia plays a mediating role between industry tournament incentives and corporate social irresponsibility.Third,the impact of industry tournament incentives on corporate social irresponsibility is subject to internal and external corporate governance mechanisms.Specifically,from the perspective of internal corporate governance mechanisms,the founder CEO and multiple major shareholders will weaken the role of industry tournament incentives in promoting corporate social irresponsibility,but the nature of the controlling shareholder(whether it is a state-owned enterprise)does not play the expected moderating role.From the perspective of external corporate governance mechanisms,short-selling pressure and the degree of regional marketization will weaken the role of industry tournament incentives in promoting corporate social irresponsibility,but the level of regional social trust does not play the expected moderating effect.In the second sub-study,this research aims to answer the following important theoretical and practical questions: whether,how and when corporate social irresponsibility affects the long-term performance of the company.Judging from the existing research results,although a few scholars have discussed the impact of corporate social irresponsibility on the short-term performance of enterprises,the research conclusions obtained are contradictory.Different from the previous research and to constitute a useful supplement,this research re-examines the economic consequences of corporate social irresponsibility from the perspective of corporate long-term performance.The practice reason behind this is: if the company and its shareholders lack a deep understanding of the long-term performance of corporate social irresponsibility,it will inevitably have a serious adverse effect on the long-term development of the company.The theory reason behind this is: the long-term performance of an enterprise is the core performance indicator for measuring the effectiveness of management.At the same time,a high level of long-term performance is also a prerequisite for the sustainable development of an enterprise.Based on the signal theory and conducted empirical tests with China's listed companies from 2003 to 2019 as the research object,this research has the following research conclusions: First,corporate social irresponsibility will have a significant negative impact on the company's long-term performance.Second,innovation performance plays a mediating role between corporate social irresponsibility and corporate long-term performance.Third,the negative impact of corporate social irresponsibility on a company's long-term performance will vary depending on the signal environment.Specifically,corporate charitable donations and industry competition intensity will weaken the negative impact of corporate social irresponsibility on corporate long-term performance.In contrast,the degree of regional marketization will enhance the negative impact of corporate social irresponsibility on the long-term performance of enterprises.This research has made the following theoretical and empirical contributions: First,this research is one of the first to systematically analyze the driving factors of corporate social irresponsibility and the boundaries of its action from the perspective of tourism incentives.Specifically,this research not only provides knowledge about whether industry tournament incentives are corporate social irresponsibility for the first time,but also clarifies the transmission path and boundary of industry tournament incentives acting on corporate social irresponsibility.Second,this research is one of the first studies to explore the impact of industry tournament incentives on corporate non-marketization strategies,thereby expanding the application fields of tournament theory and strengthening the explanatory power of tournament theory to business practice.Third,this research is one of the first studies to systematically analyze the economic consequences of corporate social irresponsibility from the perspective of long-term performance.In this process,by considering corporate socially irresponsible behavior as an unintentional negative signal from firms and exploring its signaling effect on long-term corporate performance,this research also deepens the theoretical connotation of signal theory and strengthens the explanatory power of signal theory to business practice.Finally,this research has brought constructive guidance for corporate shareholders and regulatory authorities to better prevent and govern corporate social irresponsibility,thereby helping companies achieve sustainable development and Chinese people's pursuit of a better life.