Does Rigorous Government Regulation on Nonprofits Improve Their Outputs? Evidence from China

Abstract This study mainly takes China as an example to explore the logic between government regulation and outputs of nonprofit organizations in the context of authoritarian countries. Based on the theory of embeddedness and organizational legitimacy, using the panel data of 29 mainland provinces from 2010 to 2019, and applying the fixed effect model, it is found that government regulation has a positive effect on outputs of non-profit organizations. However, it is also found that there exists a single threshold, only government regulation intensity keeps in a certain range, the positive effect is made. Further research finds that government regulation positively impacts nonprofit outputs through encouraging social donations. Our findings fill the gap of exploring the logic between government regulation and nonprofits outputs, giving some enlightenment to regulators of similar regimes countries. We also have improved the current government regulation theory based on legitimacy and embeddedness theory empirically, extended and enriched embeddedness theory.