Finding the Ethics of “Red Capitalists”: Political Connection and Philanthropy of Chinese Private Entrepreneurs

Yang, Yuchong; Tang, Min

doi:10.1007/s10551-018-3934-y

Cited by 45 publications

(41 citation statements)

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“…Therefore, there is a consensus in academia that corporate philanthropy can be strategically aligned with political legitimacy (Jia and Wang 2013 ; Kim 2017 ) or can be used to respond to government pressure (Kim 2017 ). Following this reasoning, some studies find supporting evidence that politically connected firms, whose political incentive is considered strong, have a greater propensity to engage in corporate philanthropy (Jia and Wang 2013 ; Li et al 2015 ; Kim 2017 ; Hao et al 2020 ; Yang and Tang 2020 ). Given the enormous pressure faced by the government during the pandemic, philanthropic donations can be viewed as supporting the government.…”

Section: Resultsmentioning

confidence: 96%

“…This type of pressure is particularly prominent in emerging markets (e.g., Marquis and Raynard 2015 ), leading a series of studies to investigate how corporate philanthropy is further shaped by this unique feature. In this regard, many studies find similar evidence that firms aim to build connections with authorities and seek political favors through corporate philanthropy (e.g., Sánchez 2000 ; Su and He 2010 ; Wang and Qian 2011 ; Jia and Wang 2013 ; Li et al 2015 ; Kim 2017 ; Bertrand et al 2020 ; Hao et al 2020 ; Yang and Tang 2020 ). For example, Wang and Qian ( 2011 ) find evidence that corporate philanthropy enhanced the corporate financial performance of Chinese firms from 2001 to 2006 and conclude that philanthropic activities help firms to elicit positive stakeholder responses and gain political access.…”

Section: Literature Reviewmentioning

confidence: 93%

“…Besides, firms can use philanthropy to accrue intangible benefits, which can potentially improve their competitive advantage and provide long-term benefits (e.g., Fombrun and Shanley 1990 ; Brammer and Millington 2005 ; Godfrey 2005 ). A series of studies show that corporate philanthropy can be used as a tool to build connections with authorities and seek political favors (Sánchez 2000 ; Su and He 2010 ; Wang and Qian 2011 ; Jia and Wang 2013 ; Li et al 2015 ; Kim 2017 ; Hao et al 2020 ; Yang and Tang 2020 ). This political incentive should be particularly strong in China, where the government still holds enormous regulatory power over resource allocation.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“… 4 There may be some confusion regarding our institutional level of analysis because, as mentioned in the Literature Review section, the term “institution” in the literature of corporate philanthropy usually refers to country-specific characteristics, such as government intervention and political resources, especially in the context of emerging markets (e.g., Su and He, 2010 ; Zhang, Rezaee and Zhu, 2010a , b , c ; Wang and Qian, 2011 ; Gao, 2011 ; Li et al 2015 ; Tan and Tang, 2016 ; Hao et al 2020 ; Yang and Tang, 2020 ). It is important to note that our institutional analysis investigates how changes in the same local environment affect corporate philanthropic decisions, rather than how the unique time-invariant features of the Chinese context shape corporate philanthropic practices.…”

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confidence: 99%

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Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China

et al. 2021

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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.

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Section: Resultsmentioning

confidence: 96%

Section: Literature Reviewmentioning

confidence: 93%

Section: Hypothesis Developmentmentioning

confidence: 99%

mentioning

confidence: 99%

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Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China

et al. 2021

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“…Compared to mediators of corporate philanthropy, more scholarly interest has been placed on moderators of corporate philanthropy. Some scholars have suggested that micro‐level moderators, including gender and political connections, can influence the extent to which firms engage in corporate philanthropy in specific, and corporate social performance (CSP) in general (Boulouta, 2013; Kim & Lee, 2018; Li et al., 2015, 2017; Wang & Qian, 2011; Williams, 2003; Wu et al., 2018; Yang & Tang, 2020). Williams (2003) using a sample of 185 Fortune 500 firms found that firms having a higher proportion of women serving on their boards engage in charitable giving to a greater extent than firms having a lower proportion of women serving on their boards.…”

Section: Literature Review Across Levels Of Analysismentioning

confidence: 99%

What do we know about corporate philanthropy? A review and research directions

Cha

Rajadhyaksha

2021

Business Ethics Env & Resp

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Corporate philanthropy has become an important aspect of the corporate economy. According to the Charities Aid Foundation in 2018, overall corporate giving by UK companies in the FTSE 100, measured in terms of pre-tax profit, increased by 2.4% between 2009 and 2016. The Giving USA Foundation in 2018 reported that corporate giving reached over $20 billion in 2017, which was an 8% increase over 2016 corporate giving levels. The current press Chief Executives for Corporate Purpose in 2018 provided an in-depth analysis of 2017 corporate giving data from more than 300 of the world's largest companies, and reported that two out of three companies in 2017 donated globally, with those that did, typically allocating 21% of total charitable giving to international giving. Furthermore, $2 million out of every $10 million was given globally in 2017 among companies that offered giving to international end-recipients. Clearly, companies are finding ways to apply their philanthropic engagement to advocate for worthy causes which help support their businesses.Companies are also demonstrating their international corporate citizenship by engaging in global giving, making this a topic worthy of detailed study in business and management.Corporate philanthropy as a business practice has been on the rise since the early 1950s, when the expansion of the corporate economy led to the establishment of corporate foundations (Marinetto, ). Corporations have used their foundation centers to give nonprofits cash donations as a way of demonstrating their firm's social responsibility (Eells, 1958;Horner, 1955). During the 1970s and 1980s when globalization led to corporate mobility which negatively influenced a firm's long-term relationship with communities and workforces, corporations began to use corporate philanthropy to recover these relationships (Kasper & Fulton, 2006). Since the early 1990s, corporations have responded to stakeholders' demands

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Inward FDI and local firms' political connections in emerging markets: Evidence from China

Dong,

Ma,

Cui

2024

Global Strategy Journal

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Research SummaryResearch on the spillover effects of foreign direct investment (FDI) into emerging markets has primarily focused on local firms' productivity or innovation outcomes while overlooking their nonmarket strategies. Based on the resource dependence theory, we propose that inward FDI has a U‐shaped impact on local firms' political connections. This is because when FDI is at a low to medium level, its spillover benefits substitute for local firms' dependence on government resources. As FDI further increases, its competitive threats outweigh spillover benefits, driving local firms to a greater dependence on the government to neutralize the threats. This relationship is contingent on external and internal factors altering resource similarity between FDI and local government. Our analyses of Chinese listed firms support our predictions.Managerial SummaryThis study delves into how firms in emerging markets respond to inward FDI, particularly focusing on the role of political connections as a nonmarket strategy. Our findings offer valuable insights for both local firms and governments, providing a holistic view of the opportunities and challenges associated with inward FDI. We advise local firms to adopt a balanced approach by integrating both market and nonmarket strategies to maximize benefits, as relying solely on political connections may not be the most effective way to address the challenges posed by inward FDI. Additionally, our research emphasizes the importance of evaluating the resources provided by inward FDI against those provided by local governments, as the similarity of these resources alters the role of inward FDI as perceived by local firms.

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Finding the Ethics of “Red Capitalists”: Political Connection and Philanthropy of Chinese Private Entrepreneurs

Cited by 45 publications

References 49 publications

Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China

Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China

What do we know about corporate philanthropy? A review and research directions

Inward FDI and local firms' political connections in emerging markets: Evidence from China

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