Moral capital and organizational legitimacy: Evidence from the private sector in China

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

Social legitimacy reflects a generalized perception that the actions of the organization are desirable, proper, or appropriate. Due to the importance of moral capital and moral legitimacy, organizations are using charitable giving in a more strategic manner, as those donations are helpful to enhance firm image and further improve firm performance. The social judgment of organizations is pervasive since they are embedded in normative systems and surrounded by implicit rules of what is perceived as appropriate behavior in society. The chapter explores evidence to support the argument that moral capital has a positive effect on organizational legitimacy as measured by private enterprises’ access to bank loans for either working capital or business development capital. Political capital is found to be an important strategy to enhance the legitimacy of private enterprises. China’s entry into the World Trade Organization in 2001 triggered dramatic reshaping of the banking sector.

Original languageEnglish
Title of host publicationChina's Quest for Innovation
Subtitle of host publicationInstitutions and Ecosystems
EditorsShuanping Dai, Markus Taube
PublisherRoutledge
Chapter7
Pages149-168
Number of pages20
Edition1st
ISBN (Electronic)9781351019743
ISBN (Print)9781138497146, 9781032086194
DOIs
Publication statusPublished - 13 Nov 2019
Externally publishedYes

Publication series

NameRoutledge Contemporary China Series
PublisherRoutledge

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