The influence of corporate social performance on stakeholders is one of the focal issues in corporate social responsibility research. Using data of listed companies in China, this paper examines whether CSR behavior in the form of charitable donations garners a positive reaction from suppliers. Results derived from both level and change model regressions show that superior CSP makes it easier for a firm to obtain trade credit from suppliers, although the effect is significant only in non-state-owned enterprises. The results are (...) robust to various measures of CSP and endogeneity tests. The results support the strategic philanthropy view and apply stakeholder theory in supply chain, that strategic CSR can help firms to attract suppliers and consolidate cooperative relationships with them, which in turn benefits the firms in terms of more trade credit financing from suppliers. This paper also shows that state-owned enterprises and non-SOEs have different CSR intentions and use CSR to achieve strategic goals in different ways. The conclusions drawn from this study provide practical guidance on CSR strategy, suggesting that CSR activities can help a firm in transition economies to enhance its corporate image, establish and consolidate the good relationship with suppliers, and obtain economic benefits or achieve long-term business objectives. (shrink)

How to mitigate stock price crash risk has become a focus in the theoretical and practical fields. Building on the work of Kim et al., this paper investigates the relation between corporate philanthropy and crash risk under the unique Chinese institutional background. The results show that both state ownership and the 2005 split share reform attenuate the mitigating effect of corporate philanthropy on crash risk. Specifically, the negative relation between corporate philanthropy and crash risk is less pronounced for state-owned enterprises (...) than for non-state-owned enterprises, and it is also less pronounced after firms accomplish the split share reform. Further, this effect is more pronounced for firms with greater financial risks and poorer performance. Our paper contributes to the growing literature on the determinants of stock price crash risk and the economic consequences of corporate philanthropy. It also offers useful guidance to firms that are seeking to reduce stock price crash risk in emerging markets. (shrink)

The state is a key driver of corporate social responsibility across developed and developing countries. But the existing research provides comparatively little knowledge about: (1) how companies strategically manage the relationship with the state through corporate social responsibility (CSR); (2) how this strategy takes shape under the influence of political institutions. Understanding these questions captures a realistic picture of how a company applies CSR to interacting with the state, particularly in countries where the state relationship is critical to the business (...) operation. This article draws on political legitimacy as a useful concept to directly address both strategic and politically embedded natures of CSR. This work extends the currently under-specified political implication of the strategic view of CSR and provides fresh insights to the political legitimacy research by specifying a typology of CSR-based legitimacy strategies and its contextual variation. China and Russia are the focal settings. A qualitative analysis of business—state interaction cases is done using a database that contains the majority of CSR reports published in Chinese and Russian as the end of 2009. As a result, this paper identifies four qualitatively different types of CSR-based political legitimacy strategies and reveals how the adoption of these strategies differs across Chinese companies, Russian companies, and multinational corporations. (shrink)

While business ethics has generated a great deal of research internationally over the last few decades, academic reviews of the business ethics literature remain limited. Moreover, there has been little attempt to date to analyze this literature specifically in the Greater China region, which has been experiencing rapid socioeconomic growth and dynamic evolution of business ethics in recent decades. This paper addresses this research gap by undertaking a comprehensive and critical appraisal of the business ethics literature on Greater China. In (...) particular, it maps out the existing research findings, identifies limitations in methodology, and suggests future directions for business ethics research in this region. The findings indicate that the scholarly interests cover 24 research themes, including corporate social responsibility and social performance; ethical beliefs, judgment, values, decision-making, and culture; workplace ethics and behavior; marketing ethics and consumer behavior; and sustainability. This review reveals a growing imbalance between empirical and conceptual/theoretical studies on business ethics. In addition, the published works covered in this review heavily rely on survey method and convenience sampling, with a predominant focus on a single individual level of analysis. Importantly, this study identifies four directions for future research: contextualized theoretical development, addressing multilevel research, developing research design tailored to the Chinese context, and ensuring more diversified and rigorous data collection. (shrink)

In China, many private entrepreneurs have obtained political offices in the government. In this study, we argue that Chinese private entrepreneurs who are formally connected with government institutions, compared to other Chinese private entrepreneurs, tend to contribute more to philanthropic causes not only for instrumental concerns but also out of altruistic values. We submit this argument to an empirical test through a secondary data analysis of a representative sample of Chinese entrepreneurs collected by a coalition of government and industry groups. (...) The results of this analysis show that politically connected entrepreneurs are more likely to make major philanthropic donations and, at the same time, hold a stronger sense of the responsibility for doing so. The most important contribution of this research is that it reveals the ethical basis of the philanthropic activities of Chinese private entrepreneurs, especially those with political connections, that has been unappreciated by extant literature. (shrink)

In China, many private entrepreneurs have obtained political offices in the government. In this study, we argue that Chinese private entrepreneurs who are formally connected with government institutions, compared to other Chinese private entrepreneurs, tend to contribute more to philanthropic causes not only for instrumental concerns but also out of altruistic values. We submit this argument to an empirical test through a secondary data analysis of a representative sample of Chinese entrepreneurs collected by a coalition of government and industry groups. (...) The results of this analysis show that politically connected entrepreneurs are more likely to make major philanthropic donations and, at the same time, hold a stronger sense of the responsibility for doing so. The most important contribution of this research is that it reveals the ethical basis of the philanthropic activities of Chinese private entrepreneurs, especially those with political connections, that has been unappreciated by extant literature. (shrink)

To explore the motivations underpinning corporate social responsibility (CSR) decisions in China, a country characterized by extensive government intervention, this paper investigates whether building a good relationship with the government is a political incentive that is driving firms to conduct CSR by examining the effects of political connections on the latter. Our results indicate that politically connected firms exhibit better CSR. However, the effect is considerably more significant for firms with existing political relationships. Additionally, findings show that the effect is (...) more prominent in firms for which political connections are more valuable, namely, non‐state‐owned enterprises, small firms, and firms operating in less market‐oriented cities, indicating that CSR can serve as a differentiation strategy to compete against other bidders. Dividing CSR activities into economic, environmental and social aspects, we find that the social‐based activities are more likely to be driven by political motivations. By categorizing CSR and political connections, this paper not only expands the scope of political CSR and renders the generated results that have been mixed together more distinguishable, but also provides a more precise understanding of the fundamental drivers of CSR in China from the perspective of resource exchange. (shrink)

This policy-capturing study, conducted in China, investigated the cognitive basis of managerial decisions to make a corporate charitable donation, a global issue in the context of corporate social responsibility research and practice. Participants responded to a series of scenarios manipulating pressure from the five stakeholders most commonly addressed by CSR research. The independent variables examined included organizational factors and the participants’ personal values. Results indicate a large positive effect of shareholder and governmental pressure on the decision with lesser positive effects (...) from customers and competitors. Surprisingly, employee pressure had a negative effect on the decision to make a charitable donation. Further, personal values and perceived CEO attitudes toward charity were significantly related to the decisions participants made. In line with our theorizing, the findings indicate that a combination of personal, organizational, and institutional factors was salient in the minds of decision makers. (shrink)

Using empirical evidence gathered from Chinese listed companies, this article explores the relationship between micro-governance mechanisms and corporate philanthropy from a corporate governance perspective. In China’s emerging market, ultimate controlling shareholders of state-owned enterprises are reluctant to donate their assets or resources to charitable organizations; in private enterprises marked by more deviation in voting and cash flow rights, such donations tend to be more likely. However, the ultimate controllers in PEs refuse to donate assets or resources they control or own, (...) which implies that corporate philanthropy by PEs comes at the cost of others, through assets or resources owned by minority shareholders. Even after devastating natural disasters such as the 2008 Wenchuan Earthquake, the controlling shareholders continue to express reluctance to donate any assets they control. Despite widespread evidence that corporate philanthropy boosts corporate growth and profitability, these ultimate controllers indicate no intention to donate their own money as a means to improve corporate performance. (shrink)

Drawing on stakeholder theory and the concept of enlightened self-interest, we argue that firms that actively engage in corporate philanthropic giving also tend to demonstrate greater concern for investors’ interests by providing more transparent financial information and avoiding corporate misconduct. Moreover, the relationships between corporate giving, financial information transparency, and corporate misconduct vary significantly according to the firm’s ownership type, which affects the fundamental motivations for corporate philanthropy. In a sample of Chinese publicly listed firms from the 2003–2009 period, we (...) find a positive relationship between corporate giving and financial transparency, and note that the relationship is stronger for non-state-owned enterprises. We also find a significantly negative association between corporate giving and corporate misconduct for non-SOEs, but not for SOEs. Taken together, these findings suggest that responsibility to both stakeholders and shareholders is a vital part of building trust and reputations in China’s non-SOE sector. (shrink)

As an important way for enterprises to fulfill social responsibility, corporate philanthropy has attracted much attention from the academic community. But there are still few well-targeted theoretical and empirical studies on what functions the board of directors should perform to better fulfill philanthropic responsibilities. Taking this deficiency as a breakthrough, this study focuses on Chinese state-owned and private enterprises to analyze and test the functions performed by the BOD in CP. Based on the sample of Chinese A-share listed companies from (...) 2008 to 2019, the empirical results show that the BOD of state-owned enterprises mainly performs a monitoring function in CP while that of private enterprises mainly performs a consulting function. The above findings remain valid when potential biases in the quantitative analysis are considered. Further research shows that environmental dynamism and board fault lines inhibit the performance of the above two functions. The contributions of the study include clarifying the functional characteristics of the BOD in CP and its influencing factors, revealing new theories to the formation mechanism of CP, which provide references for enterprises to optimize philanthropic decision-making. The limitation should also be emphasized that our findings are based only on Chinese contexts. (shrink)

Research on corporate philanthropy typically focuses on organization-external pressures and aggregated donation behavior. Hence, our understanding of the organization-internal structures that determine whether a given organization will respond philanthropically to a specific human need remains underdeveloped. We explicate an attention-based framework in which specific dimensions of organization-level attention focus interact to predict philanthropic responses to an emergent human need. Exploring the response of Fortune Global 500 firms to the 2004 South Asian tsunami, we find that management attention focused on people (...) inside the organization interacts with both attention for places and attention for practices to predict the likelihood of charitable donations. Our research thus extends beyond the prevailing institutional perspective by highlighting the role of attention focus in corporate responsiveness to emergent societal issues. (shrink)

There is a lack of research about the political strategies used by firms in emerging countries, mainly because the literature often assumes that Western-oriented corporate political activity has universal application. Drawing on resource-dependency logics, we explore why and how firms orchestrate CPA in the institutionally challenging context of Nigeria. Our findings show that firms deploy four context-fitting but ethically suspect political strategies: affective, financial, pseudo-attribution and kinship strategies. We leverage this understanding to contribute to CPA in emerging countries by arguing (...) that corporate political strategies are shaped by the reciprocity and duality of dependency relationships between firms and politicians, and also by advancing that these strategies reflect institutional weaknesses and unique industry-level opportunities. Importantly, we shed light on the muttered dark side of CPA. We develop a CPA framework and discuss the research, practical and policy implications of our findings. (shrink)

Community development, or the socio-economic transformation of local communities, has been a significant focus of organizational ethics. Such community development programmes—whether led by state, civil society, or businesses—are animated by modernization and have involved, I argue, the production of a new moral order. As part of which, communities were imagined in particular ways, historically. Drawing on a periodization of history of philanthropy of the Tata Group (India’s leading multinational conglomerate) from the 1860s onwards, I outline the four stages involved in (...) the production of this new moral order—each with a distinct formulation of community—as part of India’s development. The shifts in imaginaries of community, I conclude, were justified and legitimized by the elites as part of the wider nation-building efforts. (shrink)

This study examines the relationship between corporate philanthropy (CP) and audit fees. Using corporate donation data from China, our investigation finds that CP is significantly positively associated with audit fees. Resource-seeking purpose and the enhanced publicity effect may be plausible channels behind this relationship. We further find that the frequency and intensity of donations reinforce this positive association. Additional analysis reveals that the resource-seeking effect exists in any type of enterprise, while the enhanced publicity effect only exists in non-SOEs. Our (...) main results remain robust to a battery of additional tests. Overall, our findings suggest that by increasing audit workload and prospective audit risk, CP could make auditors more conservative such that they charge a higher audit fee. This article emphasizes the dialectic institutional stakeholder perspective in understanding the economic consequences of CP. Both the theoretical contributions and practical implications of these findings are discussed. (shrink)

This study examines the role of corporate philanthropy in the management of reputation risk and shareholder value of the top 100 ASX listed Australian firms for the 3 years 2011–2013. The results of this study demonstrate the business case for corporate philanthropy and hence encourage corporate philanthropy by showing increasing firms’ investment in corporate giving as a percentage of profit before tax, increases the likelihood of an increase in shareholder value. However, the proviso is that firms must also manage their (...) reputation risk at the same time. There is a negative association between corporate giving and shareholder value which is mitigated by firms’ management of reputation. The economic significance of this result is that for every cent in the dollar the firm spends on corporate giving, Tobin’s Q will decrease by 0.413 %. In contrast, if the firm increase their reputation by 1 point then Tobin’s Q will increase by 0.267 %. Consequently, the interaction of corporate giving and reputation risk management is positively associated with shareholder value. These results are robust while controlling for potential endogeneity and reverse causality. This paper assists both academics and practitioners by demonstrating that the benefits of corporate philanthropy extend beyond a gesture to improve reputation or an attempt to increase financial performance, to a direct collaboration between all the factors where the benefits far outweigh the costs. (shrink)

A salient if under researched feature of the new age of global inequalities is the rise to prominence of entrepreneurial philanthropy, the pursuit of transformational social goals through philanthropic investment in projects animated by entrepreneurial principles. Super-wealthy entrepreneurs in this way extend their suzerainty from the domain of the economic to the domains of the social and political. We explore the ethics and ethical implications of entrepreneurial philanthropy through systematic comparison with what we call customary philanthropy, which preferences support for (...) established institutions and social practices. We analyse the ethical statements made at interview by 24 elite UK philanthropists, 12 customary and 12 entrepreneurial, to reveal the co-existence of two ethically charged narratives of elite philanthropic motivations, each instrumental in maintaining the established socio-economic order. We conclude that entrepreneurial philanthropy, as an ostensibly efficacious instrument of social justice, is ethically flawed by its unremitting impulse toward ideological purity. (shrink)

We review some 30 years of academic research on corporate philanthropy, taking stock of the current state of research about this rising practice and identifying gaps and puzzles that deserve further investigation. To do so, we examine a total of 162 academic papers in the fields of management, economics, sociology, and public policy, and analyze their content in a systematic fashion. We distinguish four main lines of inquiry within the literature: the essence of corporate philanthropy, its different drivers, the way (...) it is organized, and its likely outcomes. After reviewing the main findings of the literature, we build on several research gaps to highlight directions for future research on corporate philanthropy with an interest in strengthening our understanding of this fascinating phenomenon at the crossroads of business and society. (shrink)

The advocates of “doing well by doing good” have advised firms to invest in corporate social responsibility (CSR), but firms may get lost on how to invest their limited resources in it since CSR is a complex concept involving many activities and different types of stakeholders. In this work, we draw upon the perspective of stakeholder saliency and the stakeholder resource-based view (SRBV) to propose that stakeholders may have different levels of expectations for CSR and contribute to firm value creation (...) differently. Therefore, firms using different CSR to treat different stakeholders (high CSR variability) will have better financial performance. We further propose that context, in particular media coverage and state ownership, moderates the relationship between CSR variability and firm performance, as stakeholders of highly visible firms and state-owned enterprises (SOEs) may frown upon a discriminate treatment in CSR. Findings based on a sample of 3313 publicly listed firms and 15,324 firm-year observations in China's stock markets during the 2010–2018 period provide good support for our predictions. (shrink)

Institutional and resource dependence theories point at the roles of government and peers’ behavior as determinants of firms’ social behavior. This is tested in this research, with important implications for both theory and practice. Using data from a national survey of Chinese private small- and medium-sized enterprises in 2008, this paper examines the role of government intervention in corporate philanthropy, as well as the moderation effect of peers’ giving. Results show that government intervention, when using a Marketization Index as a (...) measure, increases CP. In addition, the community peers’ giving enhances the positive effect of government intervention on SMEs’ giving. But the moderation effect of industry peers’ giving is generally not supported except when CP is measured as giving-to-sales. In general, community peers appear to be a clear reference for SMEs and, in relation to government intervention, exert a dominant isomorphic influence. The findings provide strong support to the neo-institutional theory perspective on philanthropy. Important theoretical and practical implications are suggested. (shrink)

This study examines whether religious belief influences an entrepreneur’s political involvement and further explores the moderating role of corporate philanthropy. Using the data from the 2008 national survey of Chinese family firms, my study provides strong evidence to show that the likelihood of political involvement is significantly higher for entrepreneurs with religious beliefs than for their counterparts, suggesting that religious entrepreneurs in Chinese family firms are more likely to participate in political affairs. This finding echoes the view that religious believers (...) acquire civic skills through their associational memberships or experience in involving religious activities. In addition, corporate philanthropy attenuates the positive association between religious belief and political involvement. The above findings are robust to a variety of sensitivity tests and are still valid after controlling for the potential endogeneity between political involvement and religious belief. (shrink)

In this study, I examine the hidden connection between corporate philanthropic giving and corporate environmental misconduct. Using survey data from Chinese family-owned firms, I provide strong and consistent evidence to show that corporate environmental misconduct is significantly positively associated with corporate philanthropic giving, suggesting that some Chinese family-owned firms act philanthropically to divert public attention from their environmentally unfriendly behavior. Moreover, the positive association between corporate environmental misconduct and corporate philanthropic giving is less pronounced for politically connected family-owned firms than (...) for their counterparts. The above results are robust to various sensitivity tests. My findings suggest that environmental misconduct dressing may be an additional motivation for corporate philanthropic giving and that different dimensions of corporate social responsibility may be inherently inconsistent in the given institutional setting. (shrink)

This paper examines the association between corporate philanthropy and tunneling by controlling shareholders. Using a unique dataset from China, the paper finds evidence that firms donating more are less likely to tunnel. The negative association between philanthropy and tunneling is stronger when firms are faced with more severe agency conflicts, as indicated by lower largest shareholding, fewer growth opportunities, lower state ownership, and weaker product market competition. The results suggest that companies engaging in philanthropy have incentives to enhance their reputations (...) and improve their relationships with stakeholders. (shrink)

We examine corporate philanthropic decisions in response to the local spread of COVID-19. From a strategic perspective, firms may proactively undertake philanthropic efforts to limit the spread of the pandemic and avoid a degraded business environment. From the perspective of non-trivial costs, increased economic uncertainty can raise concerns about business survival and lead to conservative philanthropic strategies. Following the proverb “prosperity makes friends, adversity tries them,” at the provincial level, our results support the second perspective. Specifically, when the spread of (...) the pandemic worsens in a province, local firms are less likely to make COVID-19-related donations in terms of likelihood and amount. Investors also react negatively, not only to the local spread of COVID-19 but also to COVID-19-related philanthropic donations. At the organizational level, our evidence indicates that there is at least some level of cost–benefit analysis underlying corporate philanthropic decisions. Specifically, corporate philanthropic donations, especially those made to the local business environment, are significantly affected by organizational-level factors, such as pre-existing resource availability and motives to acquire political and reputational resources. Overall, our multilevel study presents a comprehensive picture of corporate philanthropic decisions amid the COVID-19 crisis. (shrink)

During the past decades, academics and practitioners have been extensively focusing on corporate philanthropy as an important part of corporate social responsibility and a vast number of papers have been published on this topic in various disciplines. To have a better understanding of the evolution of corporate philanthropy, this paper critically reviews some 60 years of research covering 228 corporate philanthropy documents (including 214 journal articles, 5 dissertations, and 9 books and book chapters) across and between disciplines, and analyzes their (...) content in a systematic and comprehensive manner. A multi‐level and multidisciplinary theoretical framework that synthesizes and integrates the corporate philanthropy literature at micro‐, meso‐, and macro‐levels of analysis is offered. Specifically, the framework presents antecedents, intermediaries (moderators and mediators), consequences of corporate philanthropy, and the underlying mechanisms of the corporate philanthropy–firm performance relationship. This paper helps bridge important knowledge gaps of corporate philanthropy and its relation with firm performance by studying corporate philanthropy at a multi‐level of analysis and applying diverse theoretical frameworks of corporate philanthropy. The paper concludes by offering several suggestions for future research on corporate philanthropy. (shrink)

Arguably, the corporate social responsibility practices of multinational enterprises are influenced by a wide range of both internal and external factors. Perhaps, most critical among the exogenous forces operating on MNEs are those exerted by state and other key institutional actors in host countries. Crucially, academic research conducted to date offers little data about how MNEs use their CSR activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries. This paper addresses that (...) gap by exploring interactions between external institutional pressures and firm-level CSR activities, which take the form of community initiatives, to examine how MNEs develop their legitimacy-seeking policies and practices. In focusing on a developing country, Sri Lanka, this paper provides valuable insights into how MNEs instrumentally utilise community initiatives in a country where relationship-building with governmental and other powerful non-governmental actors can be vitally important for the long-term viability of the business. Drawing on neo-institutional theory and CSR literature, this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of CSR. The evidence presented and discussed here reveals the extent to which, and the reasons why, MNEs engage in complex legitimacy-seeking relationships with Sri Lankan host institutions. (shrink)