When CSR undermines marketing capability: institutional contingencies in Chinese firms

Purpose Corporate social responsibility (CSR) has been widely shown to strengthen firm competitiveness by building trust, deepening stakeholder relationships and enhancing marketing capability (MC). Yet these benefits rest on a critical premise: that stakeholders perceive CSR as authentically motivated rather than externally compelled. This study aims to examine what happens to the CSR–MC relationship when this premise is systematically suppressed by the institutional environment in which firms operate. Design/methodology/approach Drawing on relationship marketing theory and institutional theory, the authors argue that when institutional conditions lead stakeholders to interpret CSR as regulatory compliance rather than genuine organizational commitment, CSR damages MC through two mechanisms: resource diversion and relational trust erosion. The authors test this framework using panel data from 3,877 firm-year observations of Chinese A-share listed firms spanning 2008–2017, using fixed-effects regression with Heckman correction for sample selection bias. Findings CSR negatively affects MC in the Chinese institutional context. This negative effect is attenuated in regions with higher Buddhist belief density, where normative conditions are more favorable to sincere attributions of CSR motives. Conversely, the effect is amplified under heavier government intervention and for firms subject to mandatory CSR reporting – conditions that reinforce compliance-based interpretations and further suppress CSR’s relational function. Originality/value This study advances the relationship marketing literature by identifying institutional context as a boundary condition of CSR’s trust-building function, contributes to the MC literature by demonstrating that institutionally imposed CSR commitments can erode rather than build marketing competence and enriches the CSR literature by explaining why the same CSR investment produces fundamentally different capability outcomes across institutional contexts. The study also responds to calls for more B2B-grounded CSR research by demonstrating how institutional conditions shape supplier CSR’s relational value in organizational market settings.