Doing bad under industry tournament incentives: evidence from corporate social irresponsibility in China

Purpose Taking tournament and agency theories as theoretical bases, this study aims to examine whether and when industry tournament incentives affect corporate social irresponsibility (CSiR). Design/methodology/approach This study focuses on publicly listed companies in China from 2003 to 2018, with a total of 26,638 observations across 3,013 firms. Based on this dataset, the study employs a high-dimensional fixed effects model to empirically investigate the impact of industry tournament incentives on CSiR. Additionally, it explores the moderating effects of founder chief executive officers, multiple large shareholders and state-owned enterprises on this relationship. Findings This study demonstrates that industry tournament incentives have a significant positive impact on CSiR. Additionally, the findings reveal that founder-chief executive officers and multiple large shareholders weaken the above relationships, whereas state-owned enterprises have no moderating effect on the above relationships. Originality/value By analyzing and testing the relationship between industry tournament incentives and CSiR for the first time, this study contributes to the literature on industry tournament incentives, the CSiR literature and tournament theory.