Corporate philanthropy and corporate misconduct: Evidence from China

Chen, Jun; Dong, Wang; Tong, Yixing; Zhang, Frank

doi:10.1016/j.iref.2019.09.002

Cited by 31 publications

(22 citation statements)

References 66 publications

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“…Other researchers have proposed that charitable giving is inversely correlated with corporate misconduct. According to this viewpoint, firms that make substantial contributions to charitable causes are more likely to attract highly ethical employees who are not likely to engage in corporate misconduct (Chen et al, 2020;Bereskin et al, 2013).…”

Section: Corporate Reputationmentioning

confidence: 99%

Motives for corporate philanthropy and charitable causes supported

Peterson

Landuyt

Pham

2021

JSMA

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PurposeThis paper examines how the inferred motives for corporate philanthropy relate to the types of charitable causes supported.Design/methodology/approachPublished data were obtained for 256 publicly traded and private corporations from a variety of sources.FindingsThe results demonstrated that a number of motives were not significantly related to total charitable giving, but were related to how charitable funds were distributed to various charitable causes. Thus, the study provides insights on the strategic use of corporate charity as means of achieving various business objectives and advancing a theoretical understanding of corporate philanthropy strategies.Research limitations/implicationsThis study only investigated some of the presumed motives for corporate philanthropy. Even for the motives investigated in this study, no attempt was made to examine all the motivational factors that determine the level of need for a specific motive. Thus, while the present study provides some of the first evidence of a relationship between motivational factors and data on the types of charitable causes supported, there are other motivational factors that could be investigated in future studies.Practical implicationsThe results have a number of implications for managers of nonprofit organizations such as marketing/targeting potential donors. Additionally, the results could be useful for managers of for profit firms in terms of comparing corporate strategies with competing firms.Originality/valueThe study provides a framework for investigating the relationship between motivational factors and types of charitable causes supported.

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Section: Corporate Reputationmentioning

confidence: 99%

Motives for corporate philanthropy and charitable causes supported

Peterson

Landuyt

Pham

2021

JSMA

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“…Two‐thirds of all the charitable donations in China in 2010 came from corporations and 57% of corporate donations were made by private and family firms, compared with only 5% of donations in the US being made by companies (The Conference Board, 2012). Prior studies examine the reasons for this, which include building political connections (Lin et al., ), accessing bank loans (Bai, Lu, & Tao, ; Chen, Jiang, & Yu, ; Ye & Zhang, ), fulfilling religious beliefs (Du, Jian, Du, Feng, & Zeng, ), disguising environmental misconduct (Du, ), signaling governance quality (Chen, Dong, Tong, & Zhang, ), and satisfying stakeholders (Pan, Weng, Xu, & Chan, ; Wang & Qian, ). Our study shows that succession could motivate family firms to invest in corporate donations.…”

Section: Introductionmentioning

confidence: 99%

“…Other motivations may include obtaining bank loans (Bai et al., ; Chen et al., ; Ye & Zhang, ), fulfilling religious beliefs that encourage sharing and giving (Du et al., ), disguising environmental misconduct and diverting public scrutiny (Du, ), and signalling the quality of corporate governance (Chen et al., ).…”

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confidence: 99%

Paving the way for children: Family firm succession and corporate philanthropy in China

2019

Business Fin & Account

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We investigate whether internal succession in family firms motivates founders to engage in corporate philanthropy. We argue that founders who intend to pass control of the firm to their children are likely to prepare for the internal succession by building up family assets such as reputation and political connections through corporate philanthropy. Supporting our argument, we find that both the likelihood and the amount of philanthropic donations increase when listed family firms in China are in the internal succession process.The effect of successions on philanthropic donations is stronger for family firms that have political connections or are located in areas with stronger government influence in the local economy.The effect concentrates on family firms when heirs are young and inexperienced. When heirs are established, family firms actually make fewer philanthropic donations. Our results remain robust after addressing endogeneity issues.

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“…When there are controlling shareholders in listed companies, the alignment effect may appear between controlling shareholders and minority shareholders. Controlling shareholders may compromise the interests of minority shareholders in explicit or implicit ways (Du, 2014(Du, , 2015Haß et al, 2016;Chen et al, 2018;Qu et al, 2020;Tareq et al, 2020), and an entrenchment effect may appear instead of the alignment effect (Morck et al, 1988;Claessens et al, 2002). When the alignment effect exists, controlling shareholders may transfer profits to the listed companies through the related-party transaction for the purpose of supporting the listed company.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Tunnelling in asset‐injecting private placements: evidence from China

Wei-dong

Wang

Luo

et al. 2021

Accounting & Finance

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Following the reform of shareholder structures in China, the country's listed companies have seen a boom in asset injection using private equity placements. However, because of continuing weaknesses in corporate governance structures and accounting regulations on related-party transactions, it is possible for controlling shareholders to 'tunnel' listed companies through unsound private placements. We find that manipulation of the discount rate offered in private placements, accompanied by earnings management behaviour, is used by controlling shareholders to 'tunnel' listed companies during the private placement and asset-injecting process.

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Corporate philanthropy and corporate misconduct: Evidence from China

Cited by 31 publications

References 66 publications

Motives for corporate philanthropy and charitable causes supported

Motives for corporate philanthropy and charitable causes supported

Paving the way for children: Family firm succession and corporate philanthropy in China

Tunnelling in asset‐injecting private placements: evidence from China

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