Is two better than one? - Evidence from the two-child policy and corporate social responsibility in China

    Project: Research project

    Project Details


    In November 2013, China announced a partial policy relaxation that allowed couples to have two children if one parent is an only child. Further, in October 2015 China allow all couples to have two children in 2016. This marks the end of China’s one-child policy, which has restricted the most of Chinese families to have only one child for more than three decades. In this study we will examine whether one category of top decision- makers, namely, senior executives and board of directors managing the listed companies in China, is systematically affected by the newly adopted two-child policy when making the corporate social responsibility (CSR) decision, using a difference-in-difference (DiD) design. We argue that, on the one hand, two-child policy arouses top managers’ awareness of social and environmental issues, changes their attitude toward various stakeholder groups, motivate them to embrace more CSR, and finally results in a higher corporate CSR performance. On the other hand, the birth of a second child is perceived by parents to be a stressful event. The increases in the children care costs, and the work-family conflict motivates parent-manager to pursue better economic performance at the cost of investing less in CSR. Therefore, whether two-child policy enhances CSR performance is thus an empirical issue. In this study, we will first test how the increased family size shapes top managers’ value and in turn affect a firm’s CSR decision. Second, we will examine whether the effect of the two-child policy on CSR activities is different across different types of firms and regions. Finally, we will investigate whether the changes in CSR activities introduced by the two-child policy results in any social externalities. The results of the study will highlight the importance of understanding public policy when analyzing manager values and firm policies. The findings will also shed light on the social externality in CSR introduced by the recent change of birth control policy in China.
    Effective start/end date1/01/2030/06/22


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