Does Disclosure Mandate Affect Firms' Contribution to Poverty Alleviation?

This paper investigates whether mandatory disclosures of companies’ engagement in poverty alleviation influence their actions to reduce poverty and promote social sustainability. We examine the Targeted Poverty Alleviation (TPA) disclosure mandate for companies listed in mainland China. This mandate significantly increases participation in poverty alleviation among mainland China-listed firms, relative to control firms that operate in mainland China but are listed exclusively in Hong Kong. We find that the effect is more pronounced among small firms, especially those that faced less political pressure prior to the disclosure mandate. Despite their lower TPA-related spending, firms that begin participating in TPA following the mandate are more likely to support central government-designated impoverished counties than firms already engaged in such activities before the mandate. Overall, our findings provide evidence of the real effects of corporate social responsibility disclosure mandates in a government-led economy, where these mandates serve to formalize political pressure.