The 131st Luojia Forum on Economics and Management Innovation hosted a compelling presentation by Professor Zou Hong from The University of Hong Kong on May 8, 2025. Addressing a packed audience of faculty and graduate students, Professor Zou shared groundbreaking findings from his study "Customer Response to Corporate Social Responsibility: Evidence from Mandatory CSR Spending," which examines how Indian consumers respond to corporate social responsibility initiatives in their purchasing decisions.

Professor Zou's research breaks new ground by investigating CSR impacts at the product level rather than traditional enterprise-wide analyses. His team identified two critical limitations in existing studies: the distortionary effects of product iteration cycles in macro-level analyses and the persistent endogeneity problems plaguing CSR research. To overcome these challenges, the study employed micro-level sales data while utilizing India's 2013 mandatory CSR policy - requiring companies to allocate 2% of pre-tax profits to CSR - as a natural experiment. This innovative methodology provides robust evidence that mandatory CSR spending leads to significant sales growth, particularly for business-to-consumer companies operating in competitive markets with historically low advertising budgets.

The study's most striking finding reveals that despite increasing operational costs, mandatory CSR investments ultimately enhance both profitability and research expenditures. These results suggest CSR regulations can create win-win scenarios for businesses and society. During the lively discussion session, Professor Zou engaged with attendees on technical aspects of the research design, including treatment group selection and alternative explanations through quality signaling effects, demonstrating how academic exchange contributes to refining impactful research.

Currently serving as Professor of Finance and Director of the HKU-Fudan IMBA Program, Professor Zou brings exceptional credentials to this work. With numerous publications in top finance journals and recognition as a top 1% most-cited researcher globally, his scholarship continues to shape understanding of corporate responsibility in emerging markets. This forum underscored the value of cross-border academic collaboration in addressing pressing questions at the intersection of business and society.

Reported by Li Lin | Reviewed by Huang Minxue