Has corporate involvement in government-initiated corporate social responsibility activities increased corporate value?-Evidence from China's Targeted Poverty Alleviation

Poverty remains the biggest challenge facing the world today. In 2016, the Chinese government launched a national campaign to eradicate poverty by 2020, among which Chinese listed companies have made significant contributions to. This paper focuses on the targeted poverty alleviation (TPA) and investigates the relationship between corporate participation in TPA and its corporate value. As compared to firm's own corporate social responsibility (CSR) initiatives, participating in government-initiated CSR activities can better enhance corporate value. This is especially so when firms engage in penetrative "integrated poverty alleviation" rather than the direct approach of "donative poverty alleviation". This paper adopts the Mediating Effect Model to explain the relationship between corporate participation in TPA and their corporate value, with the shareholding ratio of institutional investors, government subsidies and corporate reputation as mediating factors. Findings suggest that corporations' active implementation of TPA actions can increase the shareholding ratio of institutional investors and government subsidies and improve corporate reputation, thereby significantly increasing their corporate value. However, the impact of participation in TPA on corporate value is limited by factors including the nature of property rights, the intensity of competition in the industry and the degree of marketization. The impact is generally more significant in state-owned enterprises, areas with lesser industry competition and higher marketization. This study provides a fresh perspective for theories related to CSR, poverty eradication and corporate value of listed companies.