Corporate social performance feedback and corporate social responsibility decoupling in China: The salience of legitimacy and/or efficiency

Despite its detrimental effects, corporate social responsibility (CSR) decoupling has been underexamined in the literature. This research explores why and how companies engage in CSR decoupling from the perspective of behavioral theory of social performance. We contend that legitimacy threats drive firms with corporate social performance (CSP) below stakeholder expectations toward substantive CSR initiatives, which reduces CSR decoupling. In contrast, efficiency deficit drives firms with CSP above stakeholder expectations toward symbolic CSR initiatives, increasing CSR decoupling. Building upon literature on issue salience, these relationships are moderated by industry culpability and earnings pressure. A longitudinal analysis was conducted on Heckman two-stage estimation using a sample of 5166 Chinese publicly listed firms from 2010 to 2019, which supports our hypotheses. Additionally, the findings remain robust after rigorous tests. This study contributes to the CSR literature by shedding light on the impact of CSP feedback on CSR decoupling and enriches the behavioral theory of social performance by incorporating the perspective on CSP feedback through issue salience.