How geographic diversification affects corporate social responsibility? The moderating effects of ownership and environmental regulation.

As a popular strategy for firms to spread risk and reduce cost, geographic diversification might lead to more pressure from multidimensional stakeholders such as government, customer, and environment, which would inevitably affect the corporate social responsibility (CSR). With the data of Chinese A-share listed firms from 2011 to 2017, our empirical results verify that there is a significantly positive correlation between CSR and geographic diversification within China. Moreover, this correlation varies with corporate ownership and environmental regulation. The state-owned firms and those under lower environmental regulation will encounter significantly higher influence from the geographic diversification strategy. Our research has significant managerial implication for CSR in not only China, but also other countries with similar ownership structure and strongly unbalanced institutional environment.