CSR as Hedging Against Institutional Transition Risk: Corporate Philanthropy After the Sunflower Movement in Taiwan

Author: Yishu Cai (CUHK Business School)
Interviewers: Pauline Asmar (HEC Paris); Liying (Crystal) Chen (Technical University of Denmark)

Article link: https://doi.org/10.1177/00018392241307852

We had the opportunity to speak with Yishu Cai, a PhD student at CUHK Business School, about his paper “CSR as Hedging Against Institutional Transition Risk: Corporate Philanthropy After the Sunflower Movement in Taiwan.” This 2025 ASQ-published paper is co-authored with Lori Qingyuan Yue (Columbia University), Fangwen Lin (National University of Singapore), Shipeng Yan (The University of Hong Kong), and Haibin Yang (The Chinese University of Hong Kong). The interview was conducted through email exchanges.

Could you walk us through how this paper came to be? In particular, how did your initial research questions and expectations evolve as you developed the theoretical framing and empirical design of the study?

The project began with a lived curiosity that later became research once I had the right methodological tools. As an exchange student at Chengchi University in Taiwan, I learned about the Sunflower Student Movement from my roommate, and I could also see its impact on campus. On February 28, Taiwan’s Peace Memorial Day, I saw a portrait of Chiang Kai-shek, the former Kuomintang (KMT) leader, covered with a red cloth, and soon after, I witnessed a rally commemorating the March 18 Sunflower Student Movement. That sequence, linking political history and present-day conflict, felt unusually vivid. It pushed me to think more seriously about how politics permeates social and economic life and how civil society can challenge entrenched arrangements. That experience left me with a question that stayed with me: how do politically connected firms navigate the rise of civil society? Years later, events in Hong Kong brought that interest back.

A turning point came when I took a research methods course in economics and learned the difference-in-differences approach. I began with a simple question: how might the Sunflower Student Movement affect KMT-connected firms, and how might those firms respond? I sketched the initial idea and talked it through with my classmate, Fangwen, and my PhD advisor, Haibin. Fangwen and I later wrote it up as a term paper for an organizational theory seminar. Haibin’s guidance shaped the earliest version of the project, and his continued support helped anchor us as the paper grew in complexity. At the start, our story was essentially about spillovers: whether the Sunflower Student Movement would trigger a response from KMT-connected firms, even when the firms were not the movement’s direct targets. Over the review process, we reframed the question around transitional political risk, and we came to see CSR as a strategic hedge under democratic transition.

The review process at ASQ was pivotal. Although the editor was enthusiastic about the topic and context, she pushed us to move beyond describing spillovers. She also urged us to embed our argument more explicitly within the broader political and social context, with clearer theoretical and empirical mechanisms.

In the first round of revision, we experimented with institutional and sociological lenses to explain the strategic problem facing politically connected firms, and we expanded the team to include Lori and Shipeng. That collaboration changed how we understood the setting and the story we were trying to tell. Lori brought a high-level theoretical vision by introducing an elite-grassroots perspective. Conversations with Shipeng were equally important in helping us translate that macro-level lens into organizational theory arguments and concrete empirical choices.

This revision shifted our framing. We began to argue that firms, especially those closely connected to and benefiting from government policies, might respond to large-scale protests and take steps to reduce social tensions, even when they were not directly targeted. Dense elite networks tie corporate and political interests together, which can expose these firms to public backlash over perceived policy manipulation. This perspective also pushed us to sharpen how we measured KMT connections by focusing on informal and formal personnel ties to senior KMT figures rather than a broader notion of affiliation.

Even so, that revised story did not fully resonate with the editor and reviewers, leading to a second major revision that the editor flagged as high risk. A central critique was that, in trying to make the story broadly generalizable, we had underplayed the distinctive political economy of Taiwan’s political transition. The editor encouraged us to take the setting seriously on its own terms and to avoid forcing a theoretical lens that fit Western contexts better than Taiwan’s.

“A central critique was that, in trying to make the story broadly generalizable, we had underplayed the distinctive political economy of Taiwan’s political transition. The editor encouraged us to take the setting seriously on its own terms and to avoid forcing a theoretical lens that fit Western contexts better than Taiwan’s.”

So, we returned to the deep context of the setting, a process that surfaced productive debates within our team. One view emphasized democratic consolidation, suggesting that KMT-connected firms might feel pressure to become more socially responsible, shed historical burdens, and shift toward civil society or even toward rival parties. Another view argued that these firms had not truly broken from the KMT. Shaped by a corporatist logic, they still tried to preserve elements of the old elite system. Through extensive quantitative analysis alongside sustained historical work, we ultimately found evidence that partially supported both perspectives.

Working through this tension clarified the core dilemma at the heart of our paper. We realized that KMT-connected firms faced two opposing pressures. The rising power of civil society signaled potential retaliation from future governments, yet the incumbent political establishment still held enough power to punish firms that fully severed ties. Seen through this lens, their CSR efforts, especially donating to grassroots initiatives, were a strategic hedge. It helped them build legitimacy with emerging democratic forces while also aligning with the incumbent government’s desire to ease social tensions. Methodologically, the core design remained unchanged, but this theoretical evolution led us to add substantial quantitative and qualitative analyses to probe the underlying mechanisms.

Looking back, it was the iterative path through theory, evidence, and context that ultimately shaped the version published today.

Your study frames CSR as a way for firms to hedge against institutional transition risk. How does this perspective change how we should think about CSR in organizational research, especially in politically volatile environments?

Treating CSR as a hedge against institutional transition risk starts from a blunt premise: CSR is not simply a moral add-on. During political upheaval, CSR can operate as a political technology, a visible and narratable set of actions through which firms renegotiate responsibility and rebuild social support. In practice, firms often expand CSR because they want a controllable way to manage political uncertainty.

This perspective highlights two roles CSR can play during a transition. First, CSR can work like insurance for reputation and relationships, helping firms claim social usefulness when an old patron weakens and the new political order remains unsettled. Second, CSR can depoliticize contentious demands by translating calls for institutional reform and distributive justice into firm-led charity and service provision. That translation can dilute accountability and may weaken transitional justice by shifting attention from institutional responsibility to private benevolence. This possibility points to a larger agenda for future work, and it will likely benefit from closer dialogue across organizational theory, political science, and sociology.

For organizational research, this lens changes what CSR is and what it does. CSR becomes part of state-society relations and contentious politics, not just a response to a stable stakeholder field. It reframes the core questions as distributive and political: who gets defined as “the public,” which communities receive resources, what forms of silence or support CSR purchases, and whether CSR fills institutional gaps or delays institutional change. It also implies patterned heterogeneity since CSR should rise most among regime-connected firms when protests expose perceived collusion and when opposition parties and civic networks gain local power.

The takeaway is that in politically volatile environments, we cannot explain CSR if we treat politics as background context rather than part of the mechanism. Looking ahead, this lens informs my future research agenda on business-state relations, particularly in Taiwan. It provides a foundation to examine how firms deploy corporate resources and quasi-public services when formal governance is contested.

The movement you study unfolded during a period of rapid growth in social media and public access to information, and it was led largely by students. To what extent did information visibility and the leading age group shape firms’ choice of CSR as a hedging strategy?

Information visibility and student leadership both increased the appeal of CSR as a hedge, but they did so through different channels. As social media and open data expanded, reputational spillovers traveled faster, reached broader audiences, and left firms less room to deny or quietly contain controversy. In that environment, behind-the-scenes political maneuvering became less reliable, and firms had stronger incentives to use actions that were public, legible, and quick to deploy. CSR fits that need because it produces visible signals of social usefulness and offers a ready narrative of alignment with emerging norms, which can buffer the risk that prior political ties are recast as collusion. Student-led mobilization also matters. Student movements often carry moral authority and draw intense media attention; yet they typically rely more on symbolic leverage than on formal bargaining power. That combination makes legitimacy and public sentiment the main battleground. CSR can then serve as coalition building, especially when it supports issues that resonate with younger publics and helps firms appear responsive without making an explicit break with existing patrons.

Do you think CSR would have been an equally effective response if the audience or movement leadership were different?

I do not think specific types of CSR would have been equally effective if the audience or leadership had been different. When movements are led by parties, unions, or professional NGOs with real bargaining power, symbolic CSR is easier to discount, and demands tend to shift toward binding governance and disclosure reforms. When the key audiences are regulators or investors, compliance and governance redesign matter more than CSR. And when leaders represent communities with deep distrust of business, CSR can backfire unless firms share control and make credible accountability commitments. Still, our perspective highlights a general mechanism about when and why CSR becomes an attractive hedge, namely when contention is fought primarily over legitimacy, visibility, and narrative power rather than enforceable redistribution and accountability.

One caveat is that we should not over-romanticize media and information visibility. Media is not only a tool for activists; political actors can use news and social media to shape public opinion as well, including through highly strategic campaigns and counter-narratives, as recent political media battles in Taiwan and debates over “fake news” in the Trump era illustrate. I am working on related questions about digital social movements, and I hope that this line of work can add nuance to what information visibility does and does not accomplish.

“One caveat is that we should not over-romanticize media and information visibility. Media is not only a tool for activists; political actors can use news and social media to shape public opinion as well, including through highly strategic campaigns and counter-narratives, as recent political media battles in Taiwan and debates over “fake news” in the Trump era illustrate.”

Your paper examines CSR as a response to a transition toward greater democracy. Given that the current governance trends seem to shift toward more autocratic systems, would you expect firms to rely less on CSR as a hedging strategy? What alternative hedging approaches might firms use to manage political or institutional risk in such contexts?

I would be cautious about predicting that autocratization necessarily reduces CSR. A core implication of our paper is that institutional transition is long, nonlinear, and often reversible. The antecedent for firms to adopt CSR is not the linear deepening of democratization, but rather the volatility and uncertainty of the transition process itself. Firms rarely face a single regime type. Instead, they face recurring swings in accountability, enforcement, and public voice, including episodes of backsliding and reopening. In Taiwan, for example, firms worried about political retaliation under different governing coalitions, and recent debates about retaliation through the legal system captured this concern exactly. The key issue is not whether democracy advances or retreats in a straight line, but how firms adapt to repeated shifts within the broader transition process.

From that vantage point, the goal is not constant partisan switching. It is building more regime-agnostic social anchoring, meaning durable ties with civil society actors and legitimacy brokers who can matter across both liberalization and crackdowns. Even in electoral systems, polarization and shifting coalitions can intensify fears of selective enforcement, which makes it risky to bet exclusively on any single patron.

Thus, even in more autocratic systems, a mass-oriented logic can still make CSR relevant because ruling parties still seek social acceptance, even when formal participation channels narrow. What changes is the form. For example, CSR may be less likely to work as a high-visibility public signal and more likely to shift toward state-mediated, development-framed, or locally embedded programs.

This project tackles politically sensitive issues and relies on a complex empirical setting, and parts of it were developed during your doctoral studies. What were the main intellectual and practical challenges you encountered, and how did working on this study shape you as researchers?

The hardest intellectual challenge was building a bridge between personal experience, historical context, and a scholarly conversation, especially when we engaged reviewers with very different backgrounds and assumptions. I enjoyed the earliest stage most because I could follow my own interests and value commitments and start from a lived puzzle. But once we took context seriously, the work expanded quickly. We had to embed the question in the field’s language, refine mechanisms, and locate the right literature across different scholarly communities. In our case, that meant a long search and reframing journey, moving from a spillover story to a power elite lens and then to risk hedging.

“The hardest intellectual challenge was building a bridge between personal experience, historical context, and a scholarly conversation, especially when we engaged reviewers with very different backgrounds and assumptions.”

In addition, a major practical challenge involved credibility under complexity. Political transitions rarely produce clean treatments. They bring overlapping shocks, strategic adaptation, and contested narratives, so we treated research design as part of theorizing rather than a technical afterthought. Each methodological choice reflected a commitment to which counterfactual we found credible, what we could plausibly rule out, and which scope conditions we could defend.

Working on the project changed how I think about research. It pushed me toward what Mills called the sociological imagination, connecting a personal puzzle to larger political and social structures. At the same time, it also drew me to causal reasoning, and I found counterfactual thought experiments especially helpful for making sense of complex phenomena. I now start with a personal puzzle, clarify the causal question, and then ask what the broader social and political context implies for the mechanisms at work.

This project also strengthened my habit of interdisciplinary thinking. I picture social reality as a transparent crystal, with each discipline offering a distinct facet. Interdisciplinary thinking means stepping away from viewing management problems only from the surface of the management facet and instead shifting perspective to look through another side of the crystal. This shift in viewpoint often reveals unexpected theoretical insights, shining through in surprising and illuminating ways. Over time, I hope to become more fully my own theorist and methodologist.

What advice would you share with junior scholars pursuing similar research and with practitioners (e.g., policymakers and managers) who must make strategic decisions under political uncertainty?

For junior scholars, I am still early in this journey myself, so I can only share a few principles that have helped me rather than offer prescriptions. First, I have learned the value of learning from other scholars, especially senior ones. I used to think academic work was mostly about creativity and inspiration. Working closely with the professors on our team taught me that research is more about learning a language and joining an ongoing conversation. They showed me how to engage editors and reviewers and how to make an argument legible to the field. Understanding society may be our academic purpose, but learning to understand and participate in our peers’ conversations is also our responsibility.

Second, I try to stay open to interdisciplinary ways of seeing. Some of the most productive moments in this project came from reading and training outside my home field. Courses and readings in economics, sociology, political science, and communication repeatedly gave me new angles on the same phenomenon and helped me separate what was distinctive about our setting from what could travel more broadly.

For practitioners and policymakers facing political uncertainty, I would emphasize the long game. Political strategy rarely works as a series of short-term bets on factions because one reversal can wipe out years of tactical repositioning. A more durable approach is to build resilience by strengthening ties with communities and civil society and aligning with deeper social trends that outlast any single administration. For policymakers, the parallel task is to lower the returns to patronage by increasing rule predictability, protecting civic space, and ensuring credible, even-handed enforcement.

Interviewer Bios:
Pauline Asmar is a PhD student in the Strategy and Business Policy Department at HEC Paris and a member of the Sustainability and Organizations (S&O) Institute. Her research focuses on explaining how corporate purpose influences stakeholders’ perceptions of firms and their interactions with them.

Liying (Crystal) Chen is a PhD candidate in Strategy, Innovation Management, and Entrepreneurship at the Technical University of Denmark (DTU) Entrepreneurship Center. Her research uses qualitative methods to examine tensions in corporate–startup collaborations and how they are managed in the context of external corporate venturing.