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)

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)

When companies engage in corporate philanthropy, they can donate to a number of causes supporting a variety of issues, thus establishing cause portfolios. This research examines how the focus of a cause portfolio affects company evaluations. Results from an experiment show that when a company donates a small amount of money, consumers have lower evaluations of a company when the cause portfolio is focused (i.e., supports one issue) versus diverse (i.e., supports many issues). This is because the focused (vs. diverse) (...) portfolio is perceived to have a weaker impact to society. We provide additional evidence of this effect using a data set of Fortune 500 companies’ foundations, showing that cause portfolios are more likely to result in lower stakeholder evaluations when focused (vs. diverse). Again, we find that donation amount alleviates the difference between focused and diverse portfolios. The findings hold important implications for the company’s management of cause portfolios. (shrink)

We explore the potential impact of CEO entrepreneurial orientation on firm choice of CSR activities. Integrating upper echelon theory and attention-based view of the firm, we find that CEO entrepreneurial orientation leads to more engagement in CSR innovation rather than corporate philanthropy. We find that the effect of CEO entrepreneurial orientation on firm choice of CSR activities varies under two situational contexts: state-owned enterprises and incoming/departing CEO. The hypotheses are tested using two different studies. Study 1 uses a cross-sectional survey (...) of Chinese CEOs, whereas study 2 employs a longitudinal analysis of Chinese publicly listed firms from 2003 to 2017. Both studies support our theoretical hypotheses. (shrink)

The corporate ethics literature has considerably focused on whether giving results in getting. However, the relationship between corporate philanthropy and performance and the underlying mechanisms remain unclear. Drawing on signaling and cue consistency theories, we develop and test a model that specifies whether, how, and when corporate philanthropy benefits relative competitive performance from a micro-process perspective. Using a Chinese sample of 1623 employees, 145 CEOs, and 145 human resources managers, we found that corporate philanthropy could positively influence relative competitive performance (...) through the internal processes—organization-level citizenship behaviors of employees. Moreover, work–life balance practices strengthen the aforementioned mediation. In particular, when a firm performs high levels of work–life balance practices, corporate philanthropy tends to promote more citizenship behaviors in the entire organization, thereby enhancing the relative competitive performance of the firm. By contrast, when organizations perform low levels of work–life balance practices, the aforementioned mediation becomes nonsignificant. The theoretical 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)

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)

This paper proposes that a corporation’s vulnerability to public scrutiny drives its corporate giving. The hypothesis that companies donate for strategic motives is tested against the alternative that they do so for altruistic reasons. Court cases and news articles were selected as proxies for public scrutiny. Macroeconomic variables were used to gauge the level of public charitable need and test for altruism. Through examining the philanthropic behavior of 40 Fortune 500 companies over 7 years, this paper finds that companies are (...) strategic and altruistic in their giving. (shrink)

This study tests a model that links stakeholder pressure to the implementation of corporate social responsibility activities and market performance. Stakeholder groups and competitors might exert pressure on companies to implement CSR, which could lead to positive effects on market performance. Using structural equation modeling, the authors find that stakeholders and competitors exert pressure differently. The effect of CSR implementation on market performance is moderated by market dynamism: It affects market performance more in dynamic environments. The authors discuss implications for (...) both companies and stakeholders. (shrink)

To develop this study of strategic philanthropy in the United Kingdom, voluntary charitable donations policy disclosures were captured from the annual reports of two samples of U.K. companies: one of the entire Financial Times Stock Exchange 100 at year-end 2002 and another of 14 selected companies over a 15-year period. Post and Waddock's descriptions of “philanthropy strategy” and “strategic philanthropy” were employed to establish the extent to which these concepts were conveyed to readers of annual reports based on the belief (...) that high disclosure serves both agency accountability to shareholders and the information needs of soliciting charities. Conclusions drawn include that although there is a relatively high level of policy disclosure, the detail of narrative in, and consistency (over time) of, these disclosures is very patchy, and only a minority of companies show evidence of adopting a fully strategic approach to philanthropy. (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)

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 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)

This study analyzes corporate social reporting in Mexico as it has evolved in recent years, expanding and updating a previous study. Two sets of Mexican companies were identified, each of whom had expressed a commitment to corporate social responsibility (CSR) through social responsibility reports and practices on their websites. One set (" first generation") were identified as early adopters of CSR reporting in Mexico by a previous study published in 2006. The second set ("second generation") has adopted CSR reporting practices (...) since the data collection for the first study was finished. Through content analysis of the websites of both these "first generation" and "second generation" companies, general CSR reporting practices in Mexico were assessed. "First generation" companies were found to more frequently issue CSR reports and have them available in more languages than "second generation" companies. "First generation" companies also refer to stakeholders, citizenship, human rights, and code of conduct more often than "second generation" companies. The results suggest that "first generation" companies in recent years have reduced the use of local norms that focus on Mexican values, philanthropy, and a Spanishspeaking audience, and are moving more toward global norms of abiding by international standards that emphasize concrete reporting norms, along with social and environmental goals. At the same time, "second generation" companies are evolving their reporting norms in a way similar to what was observed in "first generation" companies, emphasizing local norms in their initial CSR reporting. (shrink)

Recent research suggests that philanthropy’s value to the firm is largely mediated by contextual factors such as managers’ assumed motives for charity. Our article extends this contingency perspective using a “sensegiving” lens, by which external actors’ interpretations of organizational actions may be influenced by the way in which the organization communicates about those actions. We consider how sensegiving features in philanthropy-related press releases affect whether investors value those donation decisions. For the empirical investigation in this study, we analyze abnormal returns (...) to announcements by U.S. Fortune 500 firms documenting their donations to Hurricane Katrina disaster relief in 2005. We expect that in general, donation decisions would be controversial given the uncertainty surrounding the hurricane’s economic effects at the time. However, we also propose that announcements emphasizing employee involvement in the donation send investors positive signals about the firm’s ability to bounce back from the disaster’s adverse effects. We find empirical support for the proposed hypotheses, and discuss the implications for theory and practice. (shrink)

One of the older questions in the debate about Corporate Social Responsibility (CSR) is whether it is worthwhile for organizations to pay attention to societal demands. This debate was emotionally, normatively, and ideologically loaded. Up to the present, this question has been an important trigger for empirical research in CSR. However, the answer to the question has apparently not been found yet, at least that is what many researchers state. This apparent ambivalence in CSR consequences invites a literature study that (...) can clarify the debate and allow for the drawing of conclusions. The results of the literature study performed here reveal that there is indeed clear empirical evidence for a positive correlation between corporate social and financial performance. Voices that state the opposite refer to outdated material. Since the beginnings of the CSR debate, societies have changed. We can therefore clearly state that, for the present Western society, "Good Ethics is Good Business.". (shrink)

This paper examines the strategic use of corporate philanthropy in the 1990s by UK building societies faced with an intensification of societal pressure to change legal form from mutual to corporate status. While the economic case for mutuality has been made elsewhere, this paper examines the observation that community relationships were thought by management to be capable of assisting in the strategic positioning of mutual societies with regard to their legal form. By increasing charitable giving to respond to the level (...) of societal scrutiny and discussion on the issue of mutuality, this paper argues that charitable giving, as one proxy for community involvement, was used as a strategic tool to deflect calls for demutualisation, thereby preserving the existing mutual status of building societies. (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)

ABSTRACT:This study examines whether the empirical evidence on the relationship between corporate social performance (CSP) and corporate financial performance (CFP) differs depending on the publication outlet in which that evidence appears. This moderator meta-analysis, based on a total sample size of 33,878 observations, suggests that published CSP-CFP findings have been shaped by differences in institutional logics in different subdisciplines of organization studies. In economics, finance, and accounting journals, the average correlations were only about half the magnitude of the findings published (...) in Social Issues in Management, Business Ethics, or Business and Society journals (mean corrected correlation coefficientof.22 vs..49, respectively). Specifically, economists did not find null or negative CSP-CFP correlations, and average findings published in general management outlets (=.41) were closer to Social Issues in Management, Business Ethics, and Business and Society results than to findings reported in economics, finance, and accounting journals. (shrink)

This study explores why and how firms respond to social demands through philanthropic giving in the context of a severe natural disaster. Drawing on Marquis and Qian's organizational response model to government signals, we integrate resource dependence theory and institutional theory to build a two-step model of organizational response to social needs, in situations of disaster relief. We argue that firms depending more on the government for support are more likely to donate in disaster relief, while firms who receive more (...) scrutiny from the government and the general public and firms having more slack resources are likely to donate more. Evidence from Chinese listed companies' donations to the 2008 Sichuan earthquake largely supports our predictions. This study provides a more precise understanding of the corporate philanthropic decision process, decoupling the drivers of philanthropic giving, and those determining the amount given. Theoretical and practical implications are suggested. (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)

Corporate management is torn between either focusing solely on the interests of stockholders or taking into account the interests of a wide spectrum of stakeholders. Of course, there need be no conflict where taking the wider view is also consistent with maximising stockholder wealth. In this paper, we examine the extent to which a conflict actually exists by examining the relationship between a company's positive and negative corporate social responsibility activities and equity performance. In general, we find little evidence to (...) suggest that managers taking a wider stakeholder perspective will jeopardise the interest of its stockholders. However, our findings do suggest that the market is not only influenced by the independent CSR activities, but also the totality of these activities and that the facets that they value do vary over time. It seems that most recently, the market has valued most firms that satisfied minimum requirements in the areas of diversity and environmental protection but were most proactive in the area of employee-relations. (shrink)

This paper investigates the impact of diversity on corporate philanthropy. Compared to previous studies that have considered the influence of board diversity and CEO gender on corporate philanthropy, this study introduces the concept of operational diversity, which is the implementation of diversity programs at management, employee, and supply chain levels, and further, it explains why operational diversity influences corporate philanthropy, by using the premises of resource dependence theory. Second, this study also investigates the influence of board diversity on corporate philanthropy. (...) Third, this study uses a large sample of U.S. firms over the period of 1991–2009 and tries to mitigate possible omitted variables and endogeneity problems that are often overlooked in previous research. We demonstrate that firms with operational diversity programs are likely more dependent on a broad variety of resources and give more to community as a strategic maneuver; hence, operational diversity is a better indicator for predicting future corporate giving than board diversity alone. However, having a woman or a member of a minority as a company’s chief executive officer is not sufficient to impact its charitable giving. A battery of robustness tests support our conclusion and confirm that our results are not driven by a firm’s general corporate social responsibility (CSR) score, gender or independence of board members, or firm ownership. This paper will assist researchers, practitioners, and other stakeholders in deepening their understanding of the predictors of corporate giving. (shrink)

Prior studies in business ethics highlight the role of philanthropy in shaping stakeholders’ perceptions of a firm’s underlying moral tendencies and values. Scholars argue that philanthropy-based character inferences influence whether and how stakeholders engage with firms. We extend this line of reasoning to examine the impact of philanthropy on firms’ contracting costs in the capital market. We posit that philanthropy-based character inferences reduce investors’ agency concerns, thereby reducing firms’ cost of capital. We also posit that the strength of the philanthropy–cost (...) of capital relationship is contingent on uncertainty regarding a firm’s character, visibility of a firm, and prevailing philanthropic norms. We test and find support for our arguments in a longitudinal study of philanthropy and the cost of capital. Our findings have implications for business ethics research on corporate philanthropy and corporate social performance and for organizational research on social judgment. (shrink)

In recent years, major disasters have figured prominently in the media. While corporate response to disasters may have raised corporate philanthropy to a new level, it remains an understudied phenomenon. This article draws on comparative research on corporate social responsibility (CSR) and corporate philanthropy to explore the geography of corporate philanthropic disaster response. The study analyzes donation announcements made by Fortune Global 500 firms from North America, Europe and Asia to look for regional patterns across three recent disasters: the South (...) Asian Tsunami, Hurricane Katrina, and the Kashmiri earthquake. The results reveal inter-regional differences in the overall likelihood of donations and in their cash value, in addition to the identification of home-region- and local presence effects. Implications for researchers and practitioners are discussed. (shrink)

This paper examines the strategic use of corporate philanthropy in the 1990s by UK building societies faced with an intensification of societal pressure to change legal form from mutual to corporate status. While the economic case for mutuality has been made elsewhere, this paper examines the observation that community relationships were thought by management to be capable of assisting in the strategic positioning of mutual societies with regard to their legal form. By increasing charitable giving to respond to the level (...) of societal scrutiny and discussion on the issue of mutuality, this paper argues that charitable giving, as one proxy for community involvement, was used as a strategic tool to deflect calls for demutualisation, thereby preserving the existing mutual status of building societies. (shrink)

Since the 1970s, many Anglo-American studies have investigated the theme of corporate social responsibility (CSR) and its costs and benefits. Most studies have tried to test, largely in samples of multiple industries, the relationship between corporate social performance (CSP) and corporate financial performance (CFP). These analyses, however, have produced conflicting results and any attempt to give a generalized and coherent conclusion has proved inadequate. This article examines the ways CSP can be proxied and investigates the possible relationship between CSP (measured (...) by ethical rating) and CFP (measured by market and accounting ratios) in the banking sector using correlation methodology. It emerges that there is no statistically significant link between CSP and CFP. (shrink)

Previous studies have proposed a virtuous circle between corporate social performance (CSP) and corporate financial performance (CFP). However, a key challenge researchers face when empirically examining this virtuous circle is endogeneity. In this paper, we apply a well-developed method—dynamic panel data (DPD) estimation—to account for endogeneity and conduct two studies to reexamine the causal relationship between CSP and CFP. Study 1 relies on KLD ratings from 1997 to 2012 as the measure of CSP. According to the results of Study 1, (...) although CFP measured as ROE may have a causal impact on CSP, it is doubtful whether there is a causal influence of CSP on CFP. Study 2 relies on the sustainability scores provided by Sustainalytics from 2009 to 2018 as the measure of CSP. Study 2 reports that CSP does not causally influence CFP and that CFP does not have a causal impact on CSP. Together, Study 1 and Study 2, using different measures for CSP, suggest that a virtuous circle between CSP and CFP may not exist. Our study suggests that doing good may not necessarily lead to doing well and that doing well may not naturally result in doing good. Thus, our study implies that future studies should seriously consider the causal mechanisms through which CSP may influence or may be influenced by CFP. Our paper also discusses the implications for CSP research and for management and organization research. The limitations of applying DPD estimation to empirically examine the causal relationship between CSP and CFP are also discussed. (shrink)

In spite of an overwhelming importance of business groups in the economic development of many countries, systematic inquiry on how the BGs and their affiliated firms approach and contribute to shared value creation and sustainable development is rare. In this paper we address this research gap by investigating two related questions—do BG-affiliated firms differ from non-BG firms in their corporate sustainability strategy and how does BG affiliation influence the relationship between stock of fungible resources and CSS of firms? Drawing from (...) the BG literature we theorize that BG-affiliated firms tend to adopt of both environmental and social sustainability strategies more than non-BG firms. We also argue that although according to resource-based view, the stock of fungible resources of firms positively influences CSS, BG affiliation negatively moderates the relationship between stock of fungible resources and CSS of firms. Stock of fungible resources matters less for BG-affiliated firms in undertaking CSS as they have access to resources of the BG network. We test our theoretical predictions using a proprietary data set of 163 Indian publicly listed firms, out of which 76 are BG-affiliated firms belonging to 74 BGs. The data for corporate environmental and social sustainability strategies have been obtained by administering a survey instrument among the top level executives of the participating firms. We find support for our theoretical predictions that signify that BGs and their affiliates make important contributions to shared value creation and sustainable development in emerging economies like India. (shrink)

This paper explores corporate charitable giving disclosures in order to question the extent to which corporations can claim that their philanthropy activities are charitable at all. Exploration of these issues is carried out by means of a tropological analysis that focuses on the different linguistic tropes within the philanthropy disclosures of 52 companies, namely metaphor and synecdoche. The results reveal a number of complex and contradictory things. Primarily, the master metaphor of ‘altruism’ projected by the corporate disclosures is ideologically at (...) odds with the more business case-oriented discourse that shapes the disclosures. This contradiction is put into starker contrast by the existence of a root metaphor, whereby the recipients of corporate philanthropy are presented as the ‘deserving poor’. Synecdochal devices are present within the corporate disclosures, whereby employee initiatives that are independent of corporate strategies are used to confer attributes onto the disclosures that bolster the master metaphor of ‘altruism’. As such, corporate philanthropy is presented by the paper as a structurally incoherent discourse and yet one that has implications for both extracting greater value from various societal groups and in defining, on behalf of civil society, what is a worthy cause. (shrink)

The business case for social responsibility is one of the most widely studied topics in the business and society literature that focuses on large firms. This attention is understandable because large firms have an obligation to shareholders who, as commonly assumed, seek to maximize returns on their investments, in turn, pressing corporate managers to show that firms’ expenditures in social engagement would pay off. Small firms, on the other hand, rarely face such pressures, yet the BCSR logic is increasingly applied (...) to small firms as well. Our primary objective in this paper is to examine whether and how much do small firm owners’ perceptions of BCSR affect the firm’s social engagement. In finding a fine-grained answer to those questions, we consider BCSR as a two-dimensional construct consisting of tangible and intangible benefits, and also integrate the BCSR perspective with the slack resource perspective to offer a motivation-capacity lens to examine firm’s social engagement. Drawing on a multi-industry sample of 478 small firms in the US, we find that while small firm owners’ perceptions about potential tangible benefits of social engagement are not related to the firm’s social engagement, perceptions about potential intangible are positively related. Firm's financial performance is also positively related to its social engagement, but there is no interaction between potential benefits and financial performance. This study contributes to an improved understanding about small firms’ social engagement, which still remains an understudied area. Our results are in line with studies which argue that firms’ social engagement is a response to institutional factors. (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)

This paper explores corporate charitable giving disclosures in order to question the extent to which corporations can claim that their philanthropy activities are charitable at all. Exploration of these issues is carried out by means of a tropological analysis that focuses on the different linguistic tropes within the philanthropy disclosures of 52 companies, namely metaphor and synecdoche. The results reveal a number of complex and contradictory things. Primarily, the master metaphor of 'altruism' projected by the corporate disclosures is ideologically at (...) odds with the more business case-oriented discourse that shapes the disclosures. This contradiction is put into starker contrast by the existence of a root metaphor, whereby the recipients of corporate philanthropy are presented as the 'deserving poor'. Synecdochal devices are present within the corporate disclosures, whereby employee initiatives that are independent of corporate strategies are used to confer attributes onto the disclosures that bolster the master metaphor of 'altruism'. As such, corporate philanthropy is presented by the paper as a structurally incoherent discourse and yet one that has implications for both extracting greater value from various societal groups and in defining, on behalf of civil society, what is a worthy cause. (shrink)

This research proposes an explanation for the conflicting extant evidence about whether family ownership of a business promotes proactive environmental strategy (PES). Based on insights drawn from strategic reference point theory, organizational identity theory, and the socioemotional wealth preservation perspective, we propose that family ownership has a moderated–mediated relationship with PES, with commitment as a moderator and long-term orientation as a mediator. A test using 454 China private firms with different levels of family ownership supports the hypotheses. This shows that (...) PES as a strategy related to business ethics does not happen without commitment and long-term orientation. (shrink)

ABSTRACT:We examine whether religion influences company decisions related to corporate community involvement. Employing a large US sample, we show that the CCI initiatives of a company are positively associated with the level of Christian religiosity present in the region within which that company’s headquarters is located. This association persists even after we control for a wide range of firm characteristics and after we subject our results to several econometric tests. These results support our religious morality hypothesis which holds that companies (...) headquartered in regions with higher levels of Christian religiosity will engage in more CCI initiatives. We also find that while Catholic and mainline Protestant religiosity have a positive influence on firms’ CCI initiatives, evangelical Protestant religiosity does not. This supports our differentiated responses hypothesis which holds that institutional differences among religious groups will produce different effects on companies’ CCI. This hypothesis is based on institutional theory. (shrink)

We compare the traits of companies receiving social policy shareholder resolutions with those of a set of matching firms. We show that targeted firms tend to be much larger and riskier, less profitable and less socially performing than their counterparts. The five largest investors in firms receiving social proxies tend to hold a lower stake in those firms vis‐à‐vis the matching firms. Firms in both samples, however, are not statistically different in terms of percentages of shares held by institutional and (...) insider investors. We provide possible explanations for our results. (shrink)

Drawing a framework from institutional and legitimacy theory, supplemented by concepts from the accounting literature, this study uses longitudinal crosssectional and cross-national data on over 500 firms listed in the Dow Jones Sustainability Index (DJSI) to empirically test whether these firms are strategic in their philanthropy as indicated by their measurement of the impact of their philanthropic activities along three dimensions -society, business, and reputation and stakeholder satisfaction. It is predicted that the variables' company size, amount of philanthropic expenditure, region (...) and industry influence the extent to which the various impact dimensions of philanthropy are measured. Though unexpected considering the lack of common practice in impact measurement, it is found that between 62 and 76% of the DJSI firms measure some sort of impact of their philanthropic activities, mostly impact on society and impact on reputation and stakeholder satisfaction. The number of firms that measure impact increases over the years and so does the number of firms that measure multiple dimensions of impact. Consist with our predictions, we find that larger firms and firms with relatively higher philanthropic expenditures are more likely to measure impact. Moreover, firms in the financial sector and firms from Europe and North America are also more likely to measure impact of their philanthropic activities. (shrink)

This article investigates the effects of firm size, profitability, industry affiliation, and the business cycle on retailer philanthropy. The importance of industry and firm effects on giving was analyzed with regression models using industry-fixed effects as well as firm strategy variables. The analysis included instrumental variables methodology to account for simultaneity in the charitable giving–profits relationship. Data were gathered from the IRS Corporate Statistics of Income Sourcebook, data that provide firm size class measures covering the entire firm size distribution ranging (...) from small retailers up to large multi-national retail firms. Retailer philanthropy was measured as the ratio of charitable contributions to total receipts. Important findings include a cubic relationship between retailer philanthropy and firm size; industry effects stronger than those observed for retail profit; and the absence of business cycle effects. The empirical research relating retail charitable giving to firm attributes including firm size and advertising, industry and business cycle factors are unique in the business ethics literature. Prior studies regarding the importance of industry on charitable giving utilized data across broad sectors of the economy. Firms from different sectors could be expected to differ in philanthropic approach due to differences in public contact as well as differences in public relations exposure. The strong industry effects reported for this sample of exclusively retail firms, with similar public contact, provide strong evidence for the importance of industry in determining firms’ charitable strategies. (shrink)

While previous studies have discussed how much should be given by firms, less is known about how firms would spend these investments, such as strategically allocating these philanthropy activities across geographic markets. This study examines the impact of multimarket contact on corporate philanthropy in different geographic markets. Using Chinese property insurance firms from 2007 to 2015 as samples, the results show that firms are less likely to initiate philanthropy activities in geographic markets with high multimarket contact. We also found that (...) the negative impact of multimarket competition on corporate philanthropy is stronger in highly concentrated markets. Moreover, this negative relationship is stronger when institutional distance at a firm level is low. Our study contributes to the literature on corporate philanthropy and multimarket contact. (shrink)

This article examines why firms engage in Corporate Social Responsibility (CSR). Specifically, it investigates the relationship between a firm's motivation to engage in CSR and the depth of its commitment. I propose that the enduring debate over CSR and financial performance is misaligned, and that scholars should instead focus on the underlying components of CSR engagement. This research sheds light on the motivational antecedents of a firm's engagement in CSR and their effect on CSR commitment. Despite calls for scientific investigation (...) of this linkage, it has received scant attention in the literature. Pursuing this area of research requires the construction of measures of CSR motivation and CSR commitment, as prior work generally lacks objective analysis. I present measures and a research methodology that test hypotheses about how CSR motivation relates to different levels of CSR commitment. The results of this research both validate and challenge current theory. This refined understanding of CSR engagement may enhance firm transparency and accountability to stakeholders. It may reduce the uncertainty in both internal and external assessments of firm CSR and the potential for social and financial impact. (shrink)

The phrase “corporate sustainability” is increasingly prevalent in both the industry press and management journals (Engardio, 2007; Montiel, 2008). Corporate sustainability pledges and reports are also increasingly prevalent, yet empirical studies on how top managers define and enact the construct are lacking. To address this deficiency, we investigate how firms define, support, and report their sustainability efforts. In a large sample ( N = 922) study of accounting executives at U.S.-based firms, we find evidence that organizational size, ownership, and industry (...) are strongly related with support mechanisms and reporting of sustainability. (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)

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)

Firms engage in social responsibility activities for diverse reasons. This study focuses on understanding firms' instrumental motivations for engaging in socially responsible activities. We suggest that the instrumental motivations underlying firms' corporate social responsibility engagement are associated with their market, learning, and risk-related behaviors; thus, we identify market orientation, learning orientation, and risk-taking attitudes as three constructs that influence firms' CSR engagement. This research was conducted in the Norwegian firewood sector, in which CSR expectations are high and in which we (...) expect CSR engagement to be encouraged by both instrumental and normative motivations. The firms in this study are micro-firms with fewer than 10 employees and represent an important but highly neglected segment of firms in CSR research. Data obtained from 230 firms were analyzed using structural equation modeling. Our results indicate that market orientation, learning orientation, and risk-taking attitudes affect social responsibility toward different stakeholder groups in different ways. In some cases, the size and age of firms also affect these relationships. (shrink)

Business Ethics: A European Review, EarlyView.

This review shows how the relationship between nongovernmental organizations (NGOs) and businesses has been examined in business and society, management, and international business (IB) literatures. Altogether 88 relevant studies have been identified through the analysis of article abstracts from 11 leading journals in these fields. The articles have been classified into three categories according to their focus: NGO—business interface, NGO—business— government interface, and NGOs as one of many corporate stakeholders. Six main themes are identified: (a) Activism and NGO influence, (b) (...) dyadic partnership (NGO—business), (c) cross-sector partnership (NGO—business— government), (d) global governance and standardization, (e) national-level governance, and (f) stakeholder management. The state of the research topic is assessed, and implications and avenues for further research are provided. (shrink)

This paper investigates whether corporate philanthropic decisions are associated with a firm’s listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that public firms make more charitable contributions than private firms and business group-affiliated firms make more charitable contributions than non-affiliated firms. The results suggest that public firms, owing to greater public scrutiny, and business groups, owing to higher political costs, are encouraged to make more corporate charitable contributions. Further, we (...) find that greater corporate giving by public firms than private firms is more pronounced for business group-affiliated firms, compared with non-affiliated firms. The result is consistent with business groups’ strategic coordination of their affiliates’ philanthropic decisions to tunnel business group resources out to controlling shareholders who hold a larger portion of private affiliates than public affiliates. (shrink)

Although an important feature of firms’ corporate social responsibility, the strategic pressures behind firms’ corporate philanthropy are not well researched or understood. This research note argues that firms’ CP and firms’ corporate political activity may share common strategic antecedents; forces in firms’ political environment may shape both CP and CPA. Using S&P 500 data in a longitudinal analysis, the authors find evidence suggesting that industry-level political uncertainty increases firm propensity for engaging in both CP and CPA, above and beyond the (...) propensity to engage in either as a stand-alone strategy. The authors use this preliminary evidence to explore political marketplace contingencies for the relationship between CP and CPA. CSR literature indicates that CP can benefit firms by creating and enhancing their relational wealth and institutional legitimacy. Such benefits may also serve firm interactions with government policy makers—a dynamic largely ignored until recently. The authors’ findings may indicate that, due to its institutional signaling ability and impact on firms’ reputations, CP may allow firms to differentiate themselves or stand out from others when faced with political uncertainty, and that these outcomes should be considered when firms engage in CP. (shrink)