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Interlocking Directorates, Government Capital, and CSR Disclosure: Networked Drivers in Chinese Firms

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Business Ethics A European Review

Published online on

Abstract

["Business Ethics, the Environment &Responsibility, EarlyView. ", "\nABSTRACT\nCorporate Social Responsibility (CSR) has emerged as a key basis for organizational legitimacy and competitive advantage, yet the meso‐level mechanisms by which CSR disclosure practices diffuse through interconnected corporate networks remain poorly understood. In particular, it is unclear how CSR influence cascades across both direct and indirect ties in interlocking directorate networks and how political embeddedness moderates this process in emerging economy contexts such as China. Using data from 2941 firm‐year observations of 722 publicly listed Chinese firms between 2008 and 2017, we employ a network approach grounded in social network theory and upper echelons theory to investigate how interlocking directorates facilitate CSR diffusion and how political embeddedness shapes this dynamic. Our results reveal that CSR practices are influenced not only by direct ties within interlocking directorates but also propagate through indirect connections, with influence extending up to three degrees of separation in the network. This study makes three distinct contributions: (1) to academic literature, we empirically extend CSR and upper echelons theory by integrating the “three degrees of influence” rule into the corporate context; (2) to managers, we identify interlocking directorates as cost‐effective channels for learning and adopting CSR practices; and (3) to policymakers, we provide actionable insights for designing network‐based interventions to accelerate diffusion. By highlighting the roles of government‐related social capital and network structures, our research offers novel theoretical foundations and practical implications for both practitioners and regulators seeking to promote CSR adoption and diffusion across interlocking‐directorate networks.\n"]