The dance of power and responsibility: understanding the multilevel government influence on CSR practices in Chinese state-owned enterprises

This study investigates how multilevel government influences the corporate social responsibility (CSR) practices of state-owned enterprises (SOEs). Using the control rights theory, we illustrate how the supervisor (the provincial government) utilizes residual control rights allocated by the principal (the central government) to exert both top-down binding and bottom-up buffering effects on the CSR practices of their agents (local governments and SOEs). Our findings reveal a U-shaped relationship between government control levels and SOEs' CSR practices, with administrative intervention reinforcing this trend and fiscal decentralization leading to an inverted U-shaped relationship. These insights highlight complex inter-governmental dynamics influencing SOEs' CSR practices.