Poverty remains a significant global challenge. In 2016, the Chinese government launched a national campaign to eradicate poverty by 2020, involving substantial contributions from listed companies. This study focuses on the Targeted Poverty Alleviation (TPA) program and examines the link between corporate participation in TPA and corporate value. Unlike previous research concentrating on company-initiated CSR, this paper analyzes the impact of government-initiated CSR activities, acknowledging TPA's dual nature: fulfilling public interest and meeting policy requirements. This dual aspect allows for an examination of the economic consequences from both market and policy perspectives. The study uses data from Chinese listed companies' TPA involvement between 2016 and 2018, sourced from their annual and CSR reports. The research explores whether participation in government-initiated CSR activities (like TPA) enhances corporate value more effectively than traditional corporate-initiated CSR initiatives. It also investigates whether "integrated poverty alleviation"—integrating poverty alleviation into business operations—is more beneficial than direct donations. The study’s significance lies in providing a novel perspective on CSR, poverty reduction, and corporate value for listed companies, particularly in the unique context of China's TPA program. It complements existing research by focusing on government-driven initiatives rather than solely on company-led CSR efforts.

Existing literature primarily analyzes the market-driven benefits of CSR. However, China's TPA program presents a different scenario, where corporate participation has a "semi-compulsory" element, blending public service and policy compliance. Previous studies mainly focus on the effects of corporate-initiated CSR on corporate value, yielding mixed results. Some studies suggest positive long-term impacts, while others show negative short-term effects or no clear relationship. These inconsistencies highlight the need for a more nuanced understanding that considers factors such as mediating variables and the context of government-initiated CSR activities. The study draws on Signal Transmission Theory, Reputational Capital Theory, Stakeholder Theory, and Resource Dependence Theory to frame its analysis of the impact of corporate involvement in government-initiated CSR programs like China's TPA on corporate value. Existing research on government-initiated CSR is limited but suggests potential benefits such as improved reputation and access to resources like government subsidies. This study aims to build upon this limited research by providing a comprehensive analysis of the mechanisms linking corporate participation in TPA to its corporate value.

The study uses data from Chinese listed companies' annual and CSR reports from 2016 to 2018. The primary methodology is the Differences-in-Differences (DID) approach to assess the impact of TPA participation on corporate value. Tobin's Q ratio and Return on Assets (ROA) are used as dependent variables representing corporate value. The treatment variable captures whether a company participated in TPA, categorized by methods such as monetary and resource donations. A post-treatment dummy variable indicates the period after the 2016 government policy encouraging TPA participation. Control variables incorporate firm characteristics like size, leverage, growth rate, and industry and year effects to account for confounding factors. The study addresses potential endogeneity using propensity score matching (PSM) to create a more comparable control group. Several robustness checks are employed, including: 1) substituting dependent variables (using ROA); 2) removing the first year of post-treatment data; 3) controlling for geographic factors (provincial effects); and 4) employing a Heckman two-stage model to address self-selection bias. To test the hypotheses that government-initiated CSR activities increase corporate value more than corporate-initiated CSR and that "integrated poverty alleviation" is more effective than direct donations, additional regressions are run, including a variable representing corporate-initiated CSR (Voluntary CSR report disclosure) and dummy variables representing different forms of TPA (industrial development, education, etc.). Finally, the mediating role of institutional investor shareholding, government subsidies, and corporate reputation are investigated through a mediation effect test, employing a three-path model to assess each mediating variable's influence.

The study's DID regression results show that corporate participation in TPA significantly and positively impacts corporate value, as measured by both Tobin's Q and ROA. This positive effect is robust across various robustness checks, including PSM, alternative dependent variable, exclusion of the first post-treatment year, and control for geographic effects. The Heckman two-stage model also confirms a significant positive relationship, controlling for self-selection bias. The comparison between government-initiated and corporate-initiated CSR demonstrates that government-initiated CSR (measured by TPA participation) has a stronger positive effect on corporate value. Furthermore, the analysis of different TPA approaches reveals that "integrated poverty alleviation" methods (especially industrial development and education) significantly increase corporate value compared to direct donations. The mediation analysis confirms that increased institutional investor shareholding, government subsidies, and improved corporate reputation partially mediate the relationship between TPA participation and corporate value. The study further finds that the positive effect of TPA participation on corporate value is stronger for state-owned enterprises, in less competitive industries (lower HHI), and in regions with higher marketization levels. These findings are detailed in Tables 5, 6, 7, 8, 9 and 11 of the original paper.

The findings confirm that corporate participation in government-initiated CSR activities, such as China's TPA program, can significantly enhance corporate value. This contrasts with some studies that have found mixed results for corporate-initiated CSR. The stronger positive effect of government-initiated CSR may stem from enhanced access to resources, such as government subsidies and preferential treatment, as well as increased attention from institutional investors who perceive such engagement as a signal of long-term value. The effectiveness of "integrated poverty alleviation" suggests that incorporating social responsibility into core business operations can generate greater value than purely philanthropic donations. The mediating mechanisms identified – institutional investor attention, government support, and enhanced reputation – highlight how these factors translate participation in TPA into tangible financial benefits for firms. The moderating effects of property rights, industry competitiveness, and marketization underscore the importance of contextual factors. State-owned enterprises, firms in less competitive industries, and those operating in more developed market economies tend to benefit more from TPA participation. This highlights the significant role played by institutional and economic contexts in shaping the relationship between CSR and corporate value.

This research offers novel insights into the link between government-initiated CSR and corporate value, particularly in the context of China's TPA strategy. It establishes that participation in TPA enhances corporate value, exceeding the impact of corporate-initiated CSR. The study emphasizes the superior effectiveness of "integrated poverty alleviation" and identifies key mediating factors (institutional investment, government subsidies, and reputation). The moderating influence of property rights, industry competition, and marketization highlights contextual nuances. Future research could explore the long-term impacts of TPA participation, examine other government-initiated CSR programs, and investigate the cross-national generalizability of these findings. This work holds implications for policy development and corporate strategy, suggesting that government incentives and support can foster sustainable CSR engagement with positive economic outcomes for both companies and society.

The study focuses solely on China's TPA program and may not be directly generalizable to other countries or CSR initiatives. The use of data from annual and CSR reports introduces potential limitations regarding the accuracy and completeness of reported information. While efforts were made to address endogeneity issues, the potential for unobserved confounding factors to influence the results remains. The study's time frame is relatively short (2016-2018), limiting the analysis of long-term effects. Finally, the study’s focus is on listed companies which may not represent the full spectrum of corporate involvement in TPA.