4.1 Institutional Settings in Mainland China

With the establishment of the People's Republic of China (PRC) in 1949, Mainland China introduced the socialist planning (command) economy following the Soviet Union. Mainland China began to transform its planning system to a more market-oriented economy beginning in 1978. In the early 1990s, Mainland China implemented substantial economic reforms with the main focus on expanding the role of the private sector in its economy. Since then, most of the state-owned companies, except large monopolies, had been privatized or liquidated.⁷ Many Mainland Chinese firms have been transformed from government entities to publicly traded state-owned enterprises (SOEs). The transition of the country's economic system from a centrally planned to a market-based economy fueled strong economic growth. The annual gross domestic product (GDP) growth was around 8.0 percent from 1978 to 1995. In 2013, Mainland China became the second-largest economy in the world after the United States. But Mainland China's GDP per capita of US$3,800 was much less than that of the United States. Mainland China's GDP increased to 6.9 percent year on year in the first half of 2017 and achieved 6.8 percent in the third quarter.⁸ According to the forecast of the International Monetary Fund (IMF), real GDP in Mainland China is projected to be around 6.4 percent in 2018. As it enters the 13th Five-Year Plan period (2016–2020), the Mainland Chinese economy continues to grow at a fast pace but is gradually moderating as the population ages and the economy rebalances from investment to consumption, from external to internal demand, and from manufacturing to services.⁹ The trend of GDP in Mainland China in the past two decades shows continuous and steady growth with moderating growth in recent years at about 6.4 percent. The remarkable economic growth achievement in Mainland China enables the country to have large amounts of environmental and social expenditure.

The Mainland Chinese concept of responsible business is largely influenced by Confucianism. Zi Gong (250–475 BC), Confucius' student, applied Confucianism in business and can be regarded as the first “Confucian Trader.”¹⁰ In ancient Mainland China, many Confucian traders followed and embraced Confucianism, creating the so called “traditional Chinese” CSR values. From 1949 to 1983, Confucianism gradually lost its eminence due to the prevalent political ideology. Especially during the Cultural Revolution, Confucianism was widely criticized as having dated values which were contradictory with communistic values. During this period, enterprises' main social responsibilities were to contribute to the community and the country. The economic reform in the 1900s generated a large number of private firms. Many of these private firms passively followed Western CSR requirements in order to qualify as suppliers of Western multi-national corporations (MNCs). Starting from 2000, several stakeholders including academics, governments, NGOs, and international organizations promoted CSR in Mainland China. The concepts of Harmonious Society, Outlook on Scientific Development and Ecological Civilization promoted by President Hu in the 2000s signified that the Mainland Chinese government had realized the importance of CSR.

Corporate environment including corporate governance and CSR activities in Mainland China has evolved in the past several decades through the transformation of the socialist system into a market economy system. To promote market-based corporate governance and corporate financing, stock exchanges in Shanghai and Shenzhen were established in the early 1990s.¹¹ Establishment of stock markets in Mainland China have enabled the equity and shareholding system to be integrated into corporate governance and CSR and become an important criterion for stock listing in the two exchanges. The Mainland China Securities Regulatory Commission (CSRC) was established by the Mainland Chinese government to monitor and regulate the capital markets. In January 2011, the Organization for Economic Co-operation and Development (OECD) released its report indicating that corporate governance in Mainland China had emerged and that Mainland China had shifted from a planned economy to a market economy with a focus on CSR.¹² It should be noted that CSR is a concept that is inherently consistent with the communist ideology. Until 1978, most Mainland Chinese enterprises were state-owned with administration-driven, unified and collective governance.

The Company Law and the Securities Law, both introduced in the 1990s, provide the foundation for developing a corporate governance framework in Mainland China.¹³ The CSRC is responsible for developing regulations, policies and guidelines for listed companies and monitoring effective implementation and enforcement of related regulations and achievement of CSR objectives. In 2002, the CSRC issued a Code of Corporate Governance that promotes governance principles and mechanisms for protecting shareholder rights and monitoring directors and executives of listed companies.¹⁴ Other corporate governance regulatory bodies including the National People's Congress, the State Council, the Ministry of Finance, the People's Bank of China, the Shanghai Stock Exchange and the Shenzhen Stock Exchange also participate in establishing listing standards and corporate governance and CSR guidelines.¹⁵ A survey conducted by CSR-Asia and the Embassy of Sweden in Beijing in 2015 reports that the key driver of CSR development in Mainland China is government (76 percent) and the major incentive for implementing CSR sustainability is compliance with central government policy (55 percent).¹⁶

4.2 Institutional Settings in Hong Kong

Hong Kong is a Special Administrative Region (SAR) of the People's Republic of China. Its status is defined by the Basic Law (adopted in 1990 by the National People's Assembly of China), which serves as the “Constitution” of the Territory. The Basic Law encompasses the “One Country, Two Systems” principle and leaves the legal system (common law) largely unchanged. The institutional settings in Hong Kong are shaped by the executive power and the legislative power of the Hong Kong government Administration and the Legislative Council.

The territory is governed by a Chief Executive, elected by 1,200 voters including National People's Congress deputies representing Hong Kong legislators, eminent tycoons and personalities and representatives of the different functional constituencies including professional sectors such as legal, accounting, surveying and other industry representatives.¹⁷ The government answers to the Chief Executive and is composed of 13 Bureaus and three Departments, which are assisted by 18 senior functionaries who hold the title of “Permanent Secretaries.” The unicameral legislative power is conferred to the Legislative Council. The Council votes for and amends laws and is also empowered to introduce new legislation. It examines and approves the budget, tax policies and public expenditure; appoints judges to the Court of Final Appeal; and appoints the President of the High Court. It is also responsible for monitoring the conduct of the Chief Executive and ensuring the government appropriately applies its laws and policies.¹⁸

The four pillar economic sectors of Hong Kong are trading and logistics (21.6 percent), tourism (4.7 percent), financial services (17.7 percent), professional services and other services (12.5 percent). The percentages are in terms of value added to GDP in 2016.¹⁹ On the other hand, the six industries which in Hong Kong have clear prospects of further development are cultural and creative, medical services, education services, innovation and technology, testing and certification services and environmental industries, which together accounted for 8.9 percent of GDP in terms of value added in 2015. Hong Kong is a highly attractive market for foreign direct investment (FDI) as it is the financial hub of Asia with a large presence of international and MNCs. According to the UNCTAD World Investment Report 2017, global FDI inflows to Hong Kong amounted to US$108 billion in 2016, ranked fourth globally and behind Mainland China (US$134 billion) in Asia. In terms of outflows, Hong Kong ranked third with US$62 billion in Asia, after Mainland China (US$183 billion) and Japan (US$145 billion).²⁰

Hong Kong is popular cosmopolitan city for regional headquarters or representative offices of MNCs to manage their businesses in the Asia-Pacific region, particularly Mainland China. Hong Kong society, which is strongly influenced by Confucianism, is characterized by strong power distance (hierarchy in relationships), high collectivism, lower uncertainty avoidance, moderate masculinity and long-term orientation (Hofstede, 2003).²¹ Because Hong Kong is a high collectivism society, local people who are in a group tend to get more privileges than people outside the group. Moreover, people from Hong Kong are more likely to respect their family and kinship group, because a child learns to respect the group to which it belongs, usually the family, and this would differentiate between group members and those outside the group. It is also common for Hong Kong people to seek help from relatives on various occasions particularly in a family-owned business.²²

Hong Kong had been colonized by the British for over 100 years. During the colonial period, there existed cultural mismatches between the culture and orientation of the newly settled colonizer and the citizens of the city. This created a socio-cultural plurality in Hong Kong although such plurality did not affect the corporate culture of Chinese family companies. Even with a dominant position in the international financial market and with significant investments by multi-national and international organizations in Hong Kong, Chinese family-owned businesses still play a significant role in Hong Kong's economy.

The cultural dimensions as defined by Hofstede (2003) are manifested in the corporate governance structure and CSR practices in family-owned firms in Hong Kong. In an effort to build investor confidence in corporate governance and CSR practices in Hong Kong companies, the government has made efforts to limit these cultural patterns especially for Hong Kong listed family-owned firms. In 1993 and 1994, to improve transparency and accountability, the Stock Exchange of Hong Kong (HKEX) and the Hong Kong Society of Accountants (HKSA) set up a Corporate Governance Working Group, which prescribed a number of recommended corporate governance practices and disclosures.²³ These included separation of the CEO and board chairman roles, a requirement of at least two (independent) non-executive directors, limitation of family members on the board to no more than 50 percent, and a requirement for two board committees to be composed mainly of non-executive directors. Disclosure requirements have been updated and the corporate governance code recommends that there should be a clear division of the responsibilities of board members to ensure a balance of power and authority such that power is not concentrated in any one individual.²⁴ It also included the mandatory disclosure of the relationship (including financial, business, family or other material/relevant relationships) among board members and between the chairman and the chief executive officer.

4.3 Institutional Settings in India

The institutional settings in India are influenced by its political system, economy and culture. Since its independence in 1947, India has become a democratic country, governed by the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), with a vibrant economy. Elected by an electoral college on July 25, 2017, Ram Nath Kovind is the fourteenth President of India representing the NDA.²⁵ India's president is not directly elected by residents but by an electoral college, similar to that of the United States.²⁶ In a recent budget session of the Parliament, the President stated that 2018 is the year for releasing the dream of “New India.” The government of India is committed to pay more attention to the welfare of workers and women.

The economy of India has been transformed from an agricultural and trading base to a diverse economy of manufacturing and services. The agricultural sector retains its vital role in the Indian economy. India's mixed economy includes farming, agriculture, manufacturing, information technology (IT), e-commerce, automobile and services. Services are the main drivers of the Indian economy, contributing to more than 50 percent of India's output for less than one-third of its labor force.²⁷ The growing economy of the past 20 years has shifted India from a weak developing country into the one of the five major emerging national economies, namely Brazil, Russia, India, Mainland China and South Africa (BRICS). According to the Inclusive Development Index 2018, India was ranked at sixty-second out of 74 emerging economies with an improving trend.²⁸ Two recent reforms in India concerned the 2016 demonetization (cancellation of high-value banknotes) and the Goods and Services Tax (GST) reform in July 2017.²⁹ Based on the IMF's statistics, India's average GDP was 6.7 percent in 2017, and is estimated to be 7.4 percent in 2018 with the economy bouncing back from the two major recent policy reforms.

The total population of India is around 1.3 billion. According to the US International Religious Freedom Report, Hindus represent 79.8 percent of the population, Muslims 14.2 percent, Christians 2.3 percent and Sikhs 1.7 percent. Other religions include Buddhists, Jains, Zoroastrians (Parsis), Jews and Bahais.³⁰ Despite the existence of vastly diverse religions in India, people from different religions and cultures live together in harmony. Hindu philosophy has a strong influence on Indian CSR. According to the Merriam-Webster dictionary, Vedanta is “a conventional system of Hindu philosophy developing in a qualified monism the conjectures of the Upanishads on final reality and the release of the spirit.”³¹ The Vedanta principle is applied to individual goals (liberation) and business society. In the Vedanta philosophy, the goal of business is to maximize wealth for society through ethical behaviors. Puruṣārtha in the Vedanta philosophy represents the goals of human pursuit. An individual can realize himself or herself by balancing and fulfilling the four objectives of Puruṣārtha, namely Dharma (duty), Artha (wealth), Kama (desire) and Moksha (liberation), which ensure the wellbeing and progress of humanity and society.³² From the CSR perspective, the role of business in sustainability development and environmental issues is well identified and encouraged in the Vedantic principles. For example, good karma is expected to be addressed for long-term goals. In the business setting, firms should not only focus on their own interests but also on the welfare of their stakeholders. The Hindu philosophy of karma has set a good organizational behavior (OB) framework by promoting CSR.³³

4.4 Institutional Settings in Indonesia

After a long period of Dutch colonial rule and Japanese wartime occupation, the Republic of Indonesia was formally established in 1945. In the early days of its existence, Indonesia was a nation of diverse ethnic, religious and cultural backgrounds distributed across thousands of islands under a central government. Five years after its independence, Indonesia existed as a “United Republic of Indonesia” under the federal government for seven months but then changed back to the “Unitary State of the Republic of Indonesia” designation according to the 1945 Constitution. Indonesia's highest political body is the People's Consultative Assembly (Indonesian: Majelis Permusyawaratan Rakyat Republik Indonesia, MPR), which is elected by citizens and headed by the President of Indonesia. The MPR meets every five years to discuss and finalize national policy. Since the end of the New Order era, provincial governments have been demanding that the form of centralization be removed. Indonesia started legislating for regional autonomous governments as a means of decentralization in 1999, and this was implemented in 2001.

Since 1968, Indonesia has made some achievements in its economic development after adjusting its economic structure and product markets. In the first 25-year long-term construction plan, Indonesian GDP grew at an average annual rate of 6 percent and inflation was kept within 10 percent. In April 1994, Indonesia officially entered the second 25-year long-term construction plan, that is, the phase of economic take-off. The government has relaxed investment restrictions to attract foreign investment and has taken measures to vigorously support small and medium-sized enterprises (SMEs), develop tourism and increase exports. In 1997, the Financial Crisis broke out in Southeast Asia and Indonesia's economy declined sharply. The Indonesian government immediately launched a four-year national development plan to help restore Indonesia's economy to pre-crisis levels. By 2003, the country's economy had gradually returned to stability. In recent years, the Indonesian government has been strongly supporting efforts to curb Indonesia's traditional dependence on exports of raw materials while at the same time trying to enhance the manufacturing sector in the economy. Infrastructure development is also a key goal of the government, which is expected to have a great impact on the Indonesian economy.³⁴ After a slowdown in 2011–2015, Indonesia's economic growth accelerated again in 2016. According to the World Bank, Indonesia's GDP grew by 5 percent to US$93 million in 2016, which was 0.1 percent more than in 2015.³⁵

While Indonesia is a market economy, SOEs and large private conglomerates dominate. Moreover, wealth is concentrated at the highest levels of society (and there is often a close link between the country's corporate and political elite). However, Indonesia's micro, SMEs, which accounted for 99 percent of the total number of Indonesian enterprises, are the backbone of the Indonesian economy. Indonesian business culture is deeply influenced by that of the Chinese, among whom Confucianism is representative. As most of Indonesia's large enterprises are controlled by Chinese,³⁶ Chinese culture has penetrated into the development of Indonesian enterprises for a long time. Chinese corporate culture, derived from Confucian tradition, attaches great importance to family and friendship, so the relationship between family and business is substantial.³⁷ Many large businesses are controlled and owned by a single family. Besides the Chinese, Indonesia is also deeply influenced by Islamic culture. Islamic culture permeated the government and Muslim-owned enterprises very early had a profound cultural, social and moral impact on Indonesian society. For example, the Islamic Sharia provides that private persons shall not control public facilities (roads, oil, mining, etc.) that are essential to public society and that the results of private productivity shall benefit the community and the Muslim population.³⁸

4.5 Institutional Settings in Japan

Japan began to build an economic power state at the end of World War II. From 1945 to 1952, the United States' occupation of Japan resulted in the rebuilding of the country and the creation of a democratic nation. In the late 1980s, domestic demand propelled the Japanese economy. This development involved fundamental economic restructuring, moving from dependence on exports to reliance on domestic consumption. However, during the same period, rising stock and real estate prices contributed to the buildup of an economic bubble in the Japanese economy. The economic bubble came to an abrupt end as the Tokyo Stock Exchange crashed in 1990–1992 as real estate prices peaked in 1991. Growth in Japan throughout the 1990s at 1.5 percent was slower than that in other major developed economies, giving rise to the term “Lost Decade.” During this period, the Japanese government undertook “structural reform” intended to wring speculative excesses from the stock and real estate markets. Unfortunately, these policies led Japan into numerous deflation periods between 1999 and 2004. Meanwhile, Japan adopted another technique called “quantitative easing.” The Bank of Japan expanded the money supply internally to induce expectations of inflation. By 2005, the economy finally began a seemingly sustained recovery. In July 2006, the government ended its zero-rate policy. In 2008, the Japanese Central Bank continued to have the lowest interest rates among developed economies. Deflation still persisted³⁹ and the Nikkei 225 Index had fallen over 50 percent. In yet another effort, on April 5, 2013, the Bank of Japan announced that it would be purchasing 60–70 trillion yen in bonds and securities to attempt to eliminate deflation by doubling the money supply in Japan over the next two years. Markets around the world responded positively to the government's proactive policies, with the Nikkei 225 adding more than 42 percent since November 2012. In 2017, strong global demand and the Bank of Japan's ultra-accommodative monetary policy continued to shore up Japan economic activities.

The CSR practice in Japan is largely influenced by Confucian culture. According to the survey of Boardman and Kato (2003),⁴⁰ in the Tokugawa period from 1603 to 1868, Japanese merchants set up merchant house codes (kakun) rooted mostly in Confucian philosophy, which was a common practice among merchant families. However, during the Meiji period (1868–1912), some individual entrepreneurs started to suspect the compatibility between high moral standards and predominant business operations.⁴¹ From 1960, Japan also sought to change the application of CSR activities from the legal perspective. In 1991, following the crash of the Tokyo Stock Exchange, the Charter for Good Corporate Behavior, a prototype for today's CSR, was created by the Nippon Keidanren in compliance with Western CSR practices. Starting from the 2000s, the Japanese government and other institutions issued several guidance documents and standards to further promote CSR in Japan. The Japanese government also enhanced cooperation among different sectors by using “round-table conferences on social responsibility.” Japan has voiced opinions in the drawing up of international rules such as ISO 26000, the OECD Guidelines for Multi-national Enterprises and GRI and IIRC guidelines over the past years.⁴²

4.6 Institutional Settings in South Korea

The Republic of Korea (South Korea) was founded on August 15, 1948. Syngman Rhee was the first President of the Republic of Korea. After the establishment of Rhee's administration, de jure sovereignty passed to the new government. In the 1960s, General Park Chung-hee came into power under the military. The government in the 1980s was committed to economic growth by focusing on computer technology development. South Korea joined the UN and the OECD in 1991 and 1996 respectively. Moon Jae-in won the presidential election in May 2017 and replaced the former president, Park Geun-hye, who was sentenced to a 24-year jail term due to a corruption scandal.

South Korea is a developed country with a mature financial market. It is a member of the G20 as well as the N11. With a mixed economy, South Korea is dominated by family-owned enterprises (Chaebols). The economic miracle (the Miracle of Han River) reflected the fast economic growth following the Korean War in the 1950s. According to data from the World Bank, real GDP in South Korea grew by about 2.8 percent in 2016 compared to the previous year. South Korean President Moon Jae-in's economic policy is well known as “J-nomics” with the slogan “from Chaebol to people.”

The information and communication technology (ICT) sector plays an important role in the economic development of South Korea. According to the OECD Economic Outlook, South Korea is one of the world's top 10 exporters of ICT goods, which account for 10.4 percent of total value added.⁴³ Confucianism, Christianity and Buddhism are the major religions in South Korea. Confucian culture spread from Mainland China through the Korean peninsula during the Joseon Dynasty. Since then, Confucianism has influenced the country's political and social development through legislation and education. In South Korea, Confucian culture is a core element of classical morality and a source of wisdom for everyday living and affects the South Korean view of CSR.⁴⁴

4.7 Institutional Settings in Malaysia

Malaysia is a Southeast Asian country occupying parts of the Malay Peninsula and the island of Borneo. It is known for its beaches, rainforests, and mix of Malay, Chinese, Indian and European cultural influences.⁴⁵ Malaysia declared its independence from the United Kingdom in 1957. Since then, it has continued to enjoy relative prosperity, initially as a commodity exporter (rubber, tin, then palm oil and petroleum), with total income rising at 6–7 percent each year from 1970 until 2000. Real GDP grew by an average of 6.5 percent per year from 1957 to 2005. The peak of its economic performance was between the early 1980s through the mid 1990s, as the economy experienced sustained rapid growth averaging almost 8 percent annually. High levels of foreign and domestic private investment played significant roles as the economy diversified and modernized. Once heavily dependent on primary products such as rubber and tin, Malaysia today is an upper-middle-income country with a multi-sector economy based on services and manufacturing. Malaysia is one of the world's largest exporters of semiconductor components and devices, electrical goods, solar panels and information and communication technology (ICT) products.

Malaysia is a parliamentary democracy with a federal constitutional monarchy. The Paramount Ruler, commonly referred to as the Yang di-Pertuan Agong, is the head of state as well as the leader of the Islamic faith in Malaysia. Legislative power is divided between federal and state legislatures. Executive power lies in the “cabinet” led by the Prime Minister who must be a member of the lower house and commands a majority. Malaysia has two constituencies of law with the first being applied to the entire nation, passed by parliament, and requiring a two-thirds majority to amend. The second is Sharia or Islamic law, which applies to Muslims. The states normally determine Sharia Law.

The culture of Malaysia is diverse and derives from the varied cultures of the people of Malaysia. The first people to live in the area were the Orang Asal, who are the indigenous people of Malaysia. They were followed by the Malays, who immigrated there from mainland Asia in ancient times. Chinese and Indian cultural influences increased over time during trade with these countries alongside immigration to Malaysia. Other cultures which influenced that of Malaysia include Persian, Arabic and British.

The role of religion in charity in Malaysia has unique characteristics. Malaysia is a Muslim-majority country, with their faith as Muslims requiring them to contribute 25 percent of their income to charitable causes. This institution of giving (Zakat) is well established in Malaysia. Corporate philanthropy is motivated by tax incentives. The majority of Malaysian companies engage in CSR activities to maximize performance opportunities.⁴⁶

4.8 Institutional Settings in the Philippines

For more than three centuries, the Philippines was a colony of Spain; it was named after a sixteenth-century King of Spain. The Philippines was taken over by the United States in the early twentieth century after the success of the revolt against Madrid's rule. After the Philippines' declaration of autonomy in 1935, Spain and the United States continued to have significant influence on this country, especially in terms of language, religion and government. It was not until 1946 that the Philippines achieved full independence, with an American-style constitution.⁴⁷

The Philippines has a well-organized and well-structured political system composed of the democratic republic, representatives and the President. In this political system, the President is both the head of state and the head of government. The state has a multi-party system. The political hierarchy in the Philippines is not a traditional vertical hierarchy. On the contrary, the country has a horizontal hierarchy which consists of three levels, namely the executive, the legislature and the judiciary. From each of these levels there are further subdivisions in the form of vertical levels. The political hierarchy begins with the national politicians and officials. It is divided into different departments to facilitate effectiveness of administrative work. Then there are the provincial, municipal and town levels. In 2016, Rodrigo Duterte took over as President of the Philippines.

Since the 1960s, the Philippines has adopted an open economic policy and actively attracted foreign investment with remarkable results. However, the economic development of the Philippines declined due to external factors such as the recession in the West. In the early 1990s, through a series of measures to revitalize the economy, the Philippines economy recovered. Since the beginning of the twenty-first century, the Philippines has taken the development of the economy and the elimination of poverty as the core policies of its administration. It has increased investment in agriculture and infrastructure construction, focused on the development of the tertiary industry and tourism, and implemented an export-oriented economic model, such that the economy continues to grow steadily. As of 2013, the main sources of foreign capital in the Philippines were from Japan, the United States, the United Kingdom, Germany, South Korea, Malaysia, Hong Kong and Mainland China, with investment in manufacturing services, real estate, financial intermediation, mining and the construction industries.

Bayanihan is a Filipino custom that derives from the Filipino word Bayan, which means a country, town or community. The word Bayanihan itself literally means “being in a bayan.” It refers to the community spirit in which people work together to achieve a common goal. When people around them are urgently in need of help, Filipinos always reach out without asking anything in return. Such is the spirit that embodies the Filipinos' idea of helping each other.

The development of business responsibility in the Philippines is very much influenced by Bayanihan. Bayanihan is also defined as a pioneer of corporate philanthropy and CSR. Philanthropy has always been a tradition in the Philippines where personal donations and voluntary services are considered “hidden forces” in the social and economic life of the Philippines, among families and groups of relatives. It is particularly common in organizations or social welfare institutions associated with religious churches. The spirit of Bayanihan is also embodied in mutual aid lending.⁴⁸ While many Filipinos may not be financially well off enough to donate to charities, the country has many volunteers. Volunteerism is also a strong testament to the Bayanihan character and the spirit of CSR in the Philippines.⁴⁹

However, it is also in this cultural context that the Philippines may be negatively affected in the development of CSR by amicable personal relationships. According to Lydia Sarmiento, former head of human resources of integrated poultry producer Vitarich Corp and current president of the family foundation, CSR in the Philippines stems from Filipinos' values of religious beliefs and a culture of caring for the family (including employees).⁵⁰ Because Filipinos' empathy leads them to help each other, when an employee makes an error in business, their colleagues are likely to cover up the problem for them even to the detriment of the company and shareholders. Managers may provide economic privileges to their family members as assistance, which has a negative impact on fair competition.

4.9 Institutional Settings in Singapore

Singapore was founded in the nineteenth century, when the British Empire established the city as a trading post. After years of development, the city has grown rapidly into a transit trade center, attracting immigrants from Mainland China, India, the Malay Islands and other regions. Singapore became a British colony in 1946. With the development of nationalism and promotion of autonomy, Singapore held its first general election in 1959. With a majority of 43 votes, the leader of the People's Action Party (PAP) became Singapore's first Prime Minister. On August 9, 1965, Singapore officially became an independent democracy.⁵¹

The Constitution of Singapore provides that executive power is vested in the President. However, the Constitution also gives the Cabinet the power of providing “general direction and control of the government.” In most cases, the President acts on the advice of the Cabinet or departments under the Cabinet. In practice, the Prime Minister of the Republic of Singapore, appointed by the President, is the head of the government of the Republic. The Prime Minister is, by default, the most powerful person in the national regime. Lee Hsien Loong is Singapore's third Prime Minister, a position he held since 2004.

Singapore's economy has been growing rapidly since its independence in 1965. Its strong economic performance is the result of an open and outward-looking development strategy. During the past decades, the composition of Singapore's exports has evolved from labor-intensive products to high-value-added products dominated by electronics, chemicals and biomedicine. With the rapid growth of the financial and commercial sectors in the Singapore economy, the impact of the service industry on the Singapore economy has become eminent over the years. In 2017, services generated nearly 70 percent of nominal value added while the other 25 percent was generated by the commodity production sector.⁵²

In response to changing challenges and opportunities, Singapore has been reassessing and formulating its long-term economic strategies and corresponding policies. To achieve its objective of becoming an international financial center, Singapore has taken various targeted measures. The Monetary Authority of Singapore has adopted a more enlightened and liberated approach to shift its focus from regulation to risk supervision. Besides this, the Monetary Authority of Singapore has implemented other measures such as actively developing the debt market, revolutionizing corporate governance, and making domestic funds more accessible to fund managers. Singapore's ability to develop into an Asian business and financial center was the result of its stable political and economic performance, excellent infrastructure, geographical location and a well-educated labor force.⁵³

On January 15, 1991, the Singaporean government formally established the “Shared Values,” which are the embodiment of Singaporean culture. The main content of the Shared Values includes specifically: “(1) Nation before community and society above self (2) Family as the basic unit of society (3) Community support and respect for the individual (4) Consensus not conflict and (5) Racial and religious harmony.”⁵⁴ The CSR of Singapore is closely related to the culture of this country. The importance and influence of Shared Values on the successful implementation of CSR in Singapore cannot be underestimated.

Shared Values can be compared to an axiom of national faith or a national ideology. For CSR, “consensus not conflict,” described by the fourth Shared Value, is particularly prominent and important because it is conducive to the harmony of the whole society. It also emphasizes the first Shared Value of communitarian interests and the legal concepts and legal system of the Singaporean elite, which are based on a cultural relativism and community-based understanding of the rights and obligations of individuals in society. The communitarian concepts of rights and responsibilities shape the approach to CSR in Singapore. In general, priority is given to the promotion of the rights and interests of the community rather than the interests of the individual. It should be noted that the concept of the rights of any stakeholder is not an important component of CSR disclosure in Singapore. Given the range of issues that could arise and the sensitive nature of CSR, a consensual approach was fully justified as it is consistent with Singapore's overall philosophy of governance.⁵⁵

4.10 Institutional Settings in Taiwan

According to ancient Chinese records, Taiwan has been under Chinese jurisdiction since ancient times. In 1894, with the defeat of the Qing Dynasty in the Sino-Japanese War, Taiwan surrendered to Japan under the Treaty of Shimonoseki. At the end of World War II, Japan announced its acceptance of the provisions of the Potsdam Proclamation on August 15, 1945 and returned Taiwan to Mainland China. In 1949, when the Kuomintang was defeated in the civil war, its leader Chiang Kai-shek fled to Taiwan with the Kuomintang military and political personnel. Taiwan was once again separated from Mainland China. In 1979, the Standing Committee of the National People's Congress of Mainland China issued a letter to the Taiwan compatriot declaring a policy of peaceful reunification of Taiwan with the motherland, aiming to realize a genuine ceasefire between the two sides of the Taiwan Strait. In 1990, Taiwan established a non-governmental organization, the Straits Exchange Foundation (SEF), to deal with matters arising from cross-strait exchanges. In 1991, the Association for Relations (ARATS) was founded by Mainland China on Taiwan Strait issues. In 1992, the ARATS and the SEF reached a consensus (the “1992 consensus”) stating that the two sides across the Straits would adhere to the One-China principle. So far, Taiwan and Mainland China have officially launched cultural and close relationship exchanges.

The Kuomintang government adopted the policy of planned economy and moderate intervention in the early period of its migration to Taiwan. With economic aid from the United States, Taiwan's economy was rebuilt through those difficult times. Since the 1960s, Taiwan has developed an export-oriented capitalist economic system in which the electronic and information industry accounts as the main export. The electronic and information industry in Taiwan occupies an important position in the global industrial chain. Most of the computer electronic components in the world are produced in Taiwan. International trade is the lifeblood of Taiwan's economy. Mainland China is Taiwan's largest trading partner both in imports and exports, followed by the United States and Japan. Unlike its neighbors South Korea and Japan, Taiwan's economy is dominated by SMEs rather than large conglomerates and MNCs. At present, the Taiwan authorities are actively promoting industrial transformation and enhancement as well as planning to focus on the development of cultural creativity, biotechnology, medical care, tourism, green energy and refined agriculture in six major emerging industries, along with ten major service industries.

Taiwan and Mainland China are culturally alike. Mainland China is typically recognized as a country with a Confucian culture and Taiwan is no exception. According to Ip (2008), Confucian family doctrine and nepotism in Taiwan are the two main factors that influence business ethics and CSR of Taiwanese enterprises.⁵⁶ Confucian family doctrine is the mainstream culture of Chinese-community countries and regions such as Mainland China, Taiwan, Hong Kong and Singapore.⁵⁷ Confucian family doctrine believes that the interests of the family are higher than those of the individual and the interests of family members are higher than the interests of non-family members. In the business context, the interests of the family are given priority in terms of power, values and wealth, while public interest is likely to be undermined by the notion of the primacy of family interest.⁵⁸ As a result of this cultural atmosphere, cronyism is popular and widespread. Cronyism in Asia places great emphasis on the concept of guanxi, which means relationship will matter and relations will provide help and support. Guanxi usually refers to connections among people who are close, particularly family members and friends. Once infiltrated into the government and corporate sectors, this cultural identity can lead to corporate scandals, government corruption and other misconduct. Therefore, family centered guanxi is a major cultural barrier to the implementation of CSR in Taiwan.⁵⁹

4.11 Institutional Settings in Thailand

The Kingdom of Thailand is located in Southeast Asia. Known historically as Siam, the country was renamed Thailand in 1939 with Bangkok as its capital. Thailand's major language is Thai and the currency is the baht (THB). The military has ruled the country since 1947 and continues to have substantial influence on various government policies. A new military-drafted constitution was signed by King Vajiralongkorn in April 2017, which indicates that democratic regulation and rule may follow a general election expected to be held during 2018.⁶⁰

In the 1960s, Thailand had made economic reforms in opening its market and attracting foreign investments. The export sector had diversified from agriculture to the electronic and textile sectors.⁶¹ By the mid 1970s, Thailand had transformed from a socio-agricultural economy to an industrialized economy.⁶² Since 1970, Thailand has made progress in its socio-economic development⁶³ with an average of 4.2 percent GDP growth per capita annually in purchasing power parity (PPP) terms. The development of tourism has provided more job opportunities for the residents of Thailand. The Thai tourism industry contributed around 9.4 percent of the GDP in 2017.⁶⁴

Thailand experienced a difficult time during the 1997 Financial Crisis. At that time, His Majesty King Bhumiphol Adulyadej introduced the “Sufficiency Economy,” which was intended to help recover the economy by achieving the sustainable development goals (SDGs) launched by the UN.⁶⁵ In the 2000s, Thailand's economy was transformed to a manufacturing and services-driven economy. Today, Thailand plays an important role in the electronic sector and the automobile's global value chains (GVCs). The electronic and automobile sectors represent 20 percent and 30 percent of the total manufacturing output respectively in Thailand.⁶⁶

As the second-largest economy in the Association of Southeast Asian Nations (ASEAN), after Indonesia, Thailand is an upper-middle-income country with an open economy and a GDP of US$404 billion with 3.2 percent annual growth in 2016.⁶⁷ Over the past decade, Thailand has experienced slow economic growth, declining foreign direct investment and political instability.⁶⁸ With a view to catching up with the high-income countries by 2036, the government of Thailand introduced a Thailand 4.0 vision that drives a productivity- and technology-oriented economy. Before Thailand 4.0, Thailand 1.0 emphasized agricultural sector development, Thailand 2.0 focused on the power sector while Thailand 3.0 addressed heavy industry.⁶⁹ Thailand 4.0 introduces structural reforms such as attracting FDI, enhancing policy framework, promoting innovation and improving human capital.

Buddhism is the primary religion in Thailand with around 95 percent of the population being Buddhist. Muslims account for about 4 percent and Catholics and Christians for less than 1 percent,⁷⁰ with the remaining population representing the Hindu, Sikh and Jewish religions. The Buddhist culture in Thailand is partially influenced by Chinese Taoism beliefs such as ancestor worship. Buddhism plays an important role in Thailand's cultural and social development. For example, Thai temples are characterized by tall domes, golden statues, unique architecture and amazing detail.⁷¹ In the context of Thai business culture, relationship building plays an important role in both business and social engagements. The development of CSR is likewise influenced by Thai culture and traditional religious beliefs. “Doing good deeds for others and making merit” is an important value that guides Thai people to behave ethically, which is primarily practiced through philanthropy and charitable donations.⁷² Hierarchy and seniority (age, authority, etc.) are important within the business organization. For instance, it is not appropriate for senior managers to meet junior representatives. Senior staff meet and negotiate only with those with comparable positions.

4.12 Institutional Settings in Vietnam

Before the 1945 August Revolution, Vietnam was a feudal colonial country under French colonialism.⁷³ The Socialist Republic of Vietnam (Vietnam) is located on the Indochinese peninsula with an estimated 94.58 million inhabitants in 2018.⁷⁴ The capital city has been Hanoi since Vietnam was reunified as the Socialist Republic of Vietnam. The main language is Vietnamese and the major religion is Buddhism.⁷⁵ Vietnam is a one-party socialist state. Established in 1930, the Communist Party of Vietnam (CPV) represents the interests of the working class and the state. The CPV adopts Marxism-Leninism and Hồ Chí Minh ideas as its firm ideological foundations, with supervision by its people. According to the World Report (2017), the CPV has a monopoly power that controls most of the nation's renovation, modernization and industrialization.⁷⁶ Under French colonial rule, the banking and credit system was governed by the Indo China Bank, which was the central bank in the Indochinese region (Vietnam, Cambodia and Laos) as well as a bank with commercial banking operations and investments. After the August Revolution, the economic and financial activities in Vietnam improved and there was a need for an independent and autonomous monetary, banking and credit system. In 1951, the Second Congress of the Vietnam Workers' Party established new economic and financial policies. President Ho Chí Minh announced that the Vietnam National Bank was to become the first people's democratic state bank in Southeast Asia. In 1961, the Vietnam National Bank was renamed the State Bank of Vietnam (SBV). The Vietnam economy experienced a recovery stage during the post-war period (1975–1985).⁷⁷ Since 1987, Vietnam's economy has been transformed from a “command market economy” to a “market-oriented economy.”⁷⁸ In the 1990s, the operational mechanism of the banking system of Vietnam was transformed from a one-tier to a two-tier system.⁷⁹

Export-oriented manufacturing and the agricultural sector contribute greatly to Vietnam's GDP, which is estimated at a 6.8 percent growth rate for 2017. The nation's increasing demand and foreign investment are also key drivers of the Vietnamese economy.⁸⁰ Compared to the same period in 2017, Vietnam's GDP was estimated to grow at 7.38 percent at national level for the first quarter of 2018 while final consumption increased by 7.13 percent, accumulated assets rose by 6.46 percent and the trade balance of goods and services increased 1.19 percent with a trade surplus compared to the same period in 2017.⁸¹ The consumer price index increased by 0.73 percent while average core inflation rose by 1.32 percent in the first quarter of 2018 as compared to 2017.⁸²

The major religions are Buddhism, Christianity, Islam, Caodaism and the Hoa Hao sect. Buddhism was the first introduced to Vietnam among the other main religions. However, Buddhism has deep influences on the nation's social and cultural development, in fine arts such as literature, architecture and painting. For example, many traditional pagodas and temples were built in the eleventh century, when Buddhism was the dominant Vietnamese religion.⁸³ The values of Vietnamese lifestyle were widely influenced by Confucian ethics, which can be traced from ancient Chinese culture. Confucianism has existed for more than 2,000 years of Vietnamese history.⁸⁴

In Vietnam's business culture, seniority is very important in government agencies and SOEs. For example, it is expected that colleagues be addressed by a designation of their position in the firm, especially senior colleagues. Ranking is another important concept in Vietnam's business environment. Juniors are expected to show great respect to senior managers, such as display of an appropriate seating position or giving gifts to the seniors.⁸⁵