Topic:

Reputation Vs. Regulation: NGO Monitoring and Corporate Social Responsibility

Time&Date: 

10:30-12:00, 2021/04/09 (Friday)

Speaker:

Prof. Bing Zhang (Nanjing University)

The past few decades witnessed the rise of private regulation and monitoring of firms by non-profit activists. Proved to be a vital role in private regulation of firms fulfilling corporate social responsibility (CSR), non-governmental organizations (NOGs) may influence corporate behavior through both corporate reputation and government regulation. Providing information about CSR performance, NGOs’ monitoring may affect corporate reputation and stakeholders’ decision. It can also reduce the cost of government supervision and increase the probability of corporate violations being discovered. Conducting a nationwide randomized controlled trial (RCT) covering 562 listed companies in China, we investigate whether companies respond to NGO monitoring and promote CSR behavior, and compare the effectiveness of the two mechanisms. We find that companies improved their CSR behavior after being reminded that they are monitored by NGOs, especially those with poor performance. Compared to the potential influence of corporate reputation, risk of being reported to the competent department for incompliance with relevant regulations has more significant impact on companies’ CSR behavior. Our results suggest the participation of NGOs into the monitoring of CSR is productive in supplementing government supervision and promoting CSR performance.

Biography:

Prof. Bing Zhang is a professor of environmental economics and policy at the School of Environment and School of Government at Nanjing University.  He is also the director of the Center for Environmental Management and Policy Analysis, supported by Nanjing University and Jiangsu Environmental Protection Department. He holds a doctorate in Environmental Planning and Management from Nanjing University and Rutgers University. His research focuses on environmental governance and policy in China. He has published a number of papers in journals of economics and policy, such as the Quarterly Journal of Economics、American Journal of Political Science, Journal of Public Economics, Journal of Development Economics, Journal of Environmental Economics and Management, Journal of Policy Analysis and Management et al.