Balancing stakeholders: how cross-listing shapes internal and external corporate social responsibility

Purpose Extant research has generally confirmed the positive impact of cross-listing on corporate social responsibility (CSR), but most studies treat CSR as a holistic concept. This study disaggregates CSR into internal (towards employee) and external (towards societal and environmental) dimensions to investigate a critical question: Does cross-listing lead firms to prioritize external stakeholders at the expense of internal commitments, thereby creating a CSR imbalance, or does it foster a higher-order balance across both dimensions? Specifically, we investigate the effects of cross-listing on both internal and external CSR, as well as the underlying mechanisms and boundary conditions. Design/methodology/approach Drawing on data for Chinese A-share listed firms from 2008 to 2022, this study leverages the A + H cross-listing arrangement as a quasi-natural experiment. We employ a difference-in-differences model with multi-way fixed effects, based on 38,908 firm-year observations from 4,721 companies. Findings The results show that cross-listing does not induce a trade-off between internal and external CSR. Instead, it significantly enhances both dimensions, guiding firms toward a higher level of balance. A mechanism analysis further reveals that cross-listing provides resource empowerment by alleviating financing constraints and achieves governance optimization through the appointment of directors with foreign experience. These two pathways jointly ensure the parallel development of internal and external CSR. Heterogeneity analysis reveals that the positive impact is stronger when the signaling value of CSR is more prominent (e.g. for firms with non-award-winning executives or under weak institutional supervision). The effect is also more significant when the long-term strategic value of CSR is fully activated (e.g. for firms led by internal successors or those classified as high-tech firms). Practical implications For managers, this study underscores the importance of developing CSR strategies that integrate both internal and external dimensions to avoid the risk of organizational hypocrisy. For policymakers, the findings suggest moving beyond one-size-fits-all incentives toward more differentiated and targeted policy instruments that can guide and support firms' internal and external CSR practices separately, thereby enhancing the sustainable competitiveness of Chinese firms in global capital markets. Originality/value This study offers novel systematic evidence that cross-listing fosters the synergistic development of internal and external CSR, addressing long-standing concerns about CSR imbalance. It further identifies resource empowerment and governance optimization as two critical transmission mechanisms. Finally, by uncovering contextual contingencies, this study provides a more nuanced perspective on CSR decision-making, thereby advancing both theoretical debates and managerial practice.