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)

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)

This paper investigates whether philanthropic giving decisions and amount of charitable giving are related to firms’ political connections and ownership type. To this end, Chinese firms listed on either the Shenzhen or Shanghai stock exchange between 2004 and 2011 are examined, where government interference in the business sector is prevalent, state ownership structure is dominant, and corporate political connections prevail. Our analyses show a significant and positive relationship between political connections and the likelihood and extent of firm contributions; a significant (...) and negative relationship between state ownership and extent of firm contributions; and a stronger relationship between political connections and corporate philanthropy in non-state-owned firms. These findings with regard to the relationship between corporate giving, political connections, and ownership type have important implications for understanding corporate giving behavior in China and in emerging markets in general. (shrink)

Panel data from 179 corporate foundations over a 9-year period were analyzed to examine how charitable giving was influenced by a recent economic slowdown. The results revealed that foundations sponsored by consumer-oriented firms reduced their support for charitable causes as economic conditions worsened. Foundations sponsored by industrial-oriented firms increased charitable contributions during the economic slowdown. The results were interpreted as being consistent with the proposed motivation for corporate giving. More specifically, it was assumed that charitable giving decisions by foundations sponsored (...) by consumer-oriented firms are consistent with a marketing-related objective to increase sales through corporate philanthropy. Foundations sponsored by industrial-oriented firms were assumed to make charitable giving decisions more from an altruistic perspective. To achieve maximum corporate benefits from charitable donations, it was recommended that corporate foundations develop a giving program that avoids the potential negative consequences associated with reducing foundation giving when the need for charitable contribution increases. (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)

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)

Largely due to the difficulty of observing behavior, empirical business ethics research relies heavily on the scenario methodology. While not disputing the usefulness of the technique, this paper highlights the importance of a careful assessment of the fit between the context of the situation described in the scenario and the knowledge and experience of the respondents. Based on a study of online auctions, we provide evidence that even respondents who have direct knowledge of the situation portrayed in the scenario may (...) develop significantly different assessments of the level of unethical behavior. Further, those assessments may be conditioned in different ways by the same moderating variables. We conclude that care should be exercised when recruiting respondents to choose only those who can be expected to understand the scenario in its true context and that separate analyses should be conducted for groups of respondents who have different perspectives within that context. (shrink)

Business Ethics: A European Review, EarlyView.

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)

This study examines the influence of mood on corporate philanthropic giving. Drawing on group emotions theory and affect-infused decision theory, we advance the argument that firms allocate greater resources to philanthropy when headquarters-based employees are in a more positive affective state. We also describe three boundary conditions in this relationship—executives’ embeddedness in the firm, executives’ latitude to engage in philanthropic giving, and the firm’s track record of corporate social irresponsibility. We test our arguments using a longitudinal dataset of philanthropic giving (...) by U.S. firms. Our study contributes to the literature by shedding light on the role of affect in shaping the decision to allocate resources to corporate philanthropy. (shrink)

While past studies have enriched our understanding of the impact of returnee executives on firm market strategy and outcomes, we know relatively little about the relationship between returnee executives and firm nonmarket strategies. Grounded in upper echelons theory, this study explores the relationship between returnee executives and corporate philanthropy, the latter of which is an important nonmarket strategy in emerging economies such as China. Using data on publicly listed Chinese companies from 2010 to 2017, we find that the proportion of (...) returnee executives is negative related to corporate philanthropy. We also find that this negative relationship is strengthened by executive ownership, but weakened by corporate prominence and political connections. Our study makes important theoretical contributions to strategic leadership research, upper echelons theory, and the literature of corporate philanthropy. The managerial implications are also discussed. (shrink)

Largely due to the difficulty of observing behavior, empirical business ethics research relies heavily on the scenario methodology. While not disputing the usefulness of the technique, this paper highlights the importance of a careful assessment of the fit between the context of the situation described in the scenario and the knowledge and experience of the respondents. Based on a study of online auctions, we provide evidence that even respondents who have direct knowledge of the situation portrayed in the scenario may (...) develop significantly different assessments of the level of unethical behavior. Further, those assessments may be conditioned in different ways by the same moderating variables. We conclude that care should be exercised when recruiting respondents to choose only those who can be expected to understand the scenario in its true context and that separate analyses should be conducted for groups of respondents who have different perspectives within that context. (shrink)

The principal–principal perspective suggests that controlling shareholders have excessive influence on corporate philanthropy and may direct corporate funds to charitable causes to support their personal interests. Analysis of a sample of Chinese private firms listed on the Shenzhen or Shanghai stock exchange between 2004 and 2011 shows that there is a significant and negative relationship between corporate giving and the share held by the largest shareholders, suggesting that controlling shareholders are opportunistic in directing corporate charitable contributions; there is a significant (...) and positive relationship between corporate giving and the political connections of the largest shareholders and their agents, suggesting compatibility between corporate contributions and the personal interests of the controlling shareholders; there is a stronger negative relationship between corporate giving and the share of the company held by the largest shareholders in politically connected firms, suggesting that political connections contribute to increased opportunistic corporate giving. Overall, our study provides important evidence for the “one dominant controlling shareholder” phenomenon by testing and extending the principal–principal framework and showing that the largest shareholders of Chinese firms appear to donate to charitable causes that ultimately serve their personal interests at the expense of minority shareholders. (shrink)

This paper aims to analyse how the discourse of CEO letters and other factors influence community involvement and Social Licence to Operate (SLO) in the mining industry. The analysis is based on qualitative information disclosed in sustainability reports and CEO letters from 32 mining firms. Content analysis was undertaken to obtain data for the study, and then a regression analysis and a multiple correspondence analysis were used to test the hypotheses defined in the study. The results indicate that the CEO (...) discourse influences how a firm expresses the importance of gaining its SLO, the philanthropic activities in which companies become involved and the destinations of the investments in the communities in which they operate. The results also show changes in the discourse between 2011 and 2015, which are, in part, explained by the difficult situation experienced by the sector during this period. The paper contributes to the Corporate Social Responsibility literature by integrating different theories from this field into the SLO framework. The analysis carried out and the results obtained are useful for both CEOs and Sustainability Managers, especially in managing their relationships with the communities where they operate or intend to operate. (shrink)

The conceptual literature increasingly portrays corporate philanthropy (CP) as an old-fashioned and ineffective operationalization of a firm’s corporate social responsibility. In contrast, empirical research indicates that corporations of all sizes, and both in developed and emerging economies, actively practice CP. This disadvantaged status of the concept, and research, on CP, complicates the advancement of our knowledge about the topic. In a systematic review of the literature containing 122 journal articles on CP, we show that this business practice is loaded with (...) unique characteristics, strengths, and weaknesses, and both conceptual and practical challenges that require renewed attention. We identify six interrelated but distinctive research themes in the literature: concept, motives, determinants, practices, business outcomes, and social outcomes. Dividing the literature on CP into six research themes creates an insightful comprehensive map of this intellectual terrain. Moreover, we distinguish among the level at which CP is analyzed: individual, organizational, institutional, or any combination of these levels. The review reveals significant gaps in the knowledge on CP. Most importantly we find that the conceptualization is limited, the research is mostly quantitative, the effects of CP on society are severely under-researched, and there is a lack of multilevel analyses. A detailed future research agenda is offered, including specific suggestions for research designs and measurements. (shrink)

Because it promises to benefit business and society simultaneously, strategic philanthropy might be characterized as a “happy marriage” of corporate social responsibility behavior and corporate financial performance. However, as evidence so far has been mostly anecdotal, it is important to understand to what extent empirics support the actual practice as well as value of a strategic approach, which creates both business and social impacts through corporate philanthropic activities. Utilizing data from the years 2006 to 2009 for a sample of the (...) Dow Jones Sustainability Index, which monitors the world’s most sustainable companies, the authors test a model of strategic philanthropy in which the dependent variable is evidence that a firm does or does not measure business and social impacts simultaneously. From the DJSI data, the authors find a proposed measure of overall corporate social performance to be the most important explanatory factor for engagement in strategic philanthropy. Moreover, this measure of CSP has a mediating effect on the relations between certain independent variables and strategic philanthropy. Other important findings provide support for the influence of the institutional factors industry and region on the likelihood that companies are practicing strategic philanthropy, but little effect of the business characteristics company size and profitability on that likelihood. (shrink)