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<p>This study investigates how firms adjust corporate social responsibility (CSR) investments in response to labor cost pressures driven by increases in minimum wage (MW) standards. Using panel data from 3,490 listed firms in Shanghai and Shenzhen (2010–2021), this study examines the differential effects of MW hikes on responsive CSR and strategic CSR. The results show that MW increases significantly reduce the overall CSR, with a stronger negative impact on responsive CSR. Mechanism analysis indicates that wage hikes worsen financial constraints, leading firms to reduce flexible, short-term CSR spending, while operational efficiency remains largely unaffected. Heterogeneity analysis reveals that the suppression of responsive CSR is more pronounced among labor-intensive industries, highly competitive markets, and private enterprises. By introducing the MW policy as an exogenous cost shock, this study identifies a novel driver of CSR adjustment and provides new insights into firms’ resource allocation under constraints. These findings offer practical guidance for firms seeking to recalibrate their CSR strategies amid changing macroeconomic conditions.</p>

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Navigating labor cost pressures: the impact of minimum wage increases on corporate social responsibility investments

  • 期刊论文

  • 发表日期：

    2025年11月10日

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  • Jia Yuan,
  • Ke Zhang,
  • Bing Hu

摘要

This study investigates how firms adjust corporate social responsibility (CSR) investments in response to labor cost pressures driven by increases in minimum wage (MW) standards. Using panel data from 3,490 listed firms in Shanghai and Shenzhen (2010–2021), this study examines the differential effects of MW hikes on responsive CSR and strategic CSR. The results show that MW increases significantly reduce the overall CSR, with a stronger negative impact on responsive CSR. Mechanism analysis indicates that wage hikes worsen financial constraints, leading firms to reduce flexible, short-term CSR spending, while operational efficiency remains largely unaffected. Heterogeneity analysis reveals that the suppression of responsive CSR is more pronounced among labor-intensive industries, highly competitive markets, and private enterprises. By introducing the MW policy as an exogenous cost shock, this study identifies a novel driver of CSR adjustment and provides new insights into firms’ resource allocation under constraints. These findings offer practical guidance for firms seeking to recalibrate their CSR strategies amid changing macroeconomic conditions.