Do Politically Connected Firms Engage More or Less in Corporate Philanthropy? Evidence from Public and Private Firms in China

Posted: 25 Jan 2013

See all articles by Nan Jia

Nan Jia

University of Southern California - Marshall School of Business

Jing Shi

Macquarie University

Yongxiang Wang

University of Southern California - Marshall School of Business

Date Written: January 24, 2013

Abstract

This paper examines whether politically connected firms engage more or less in corporate philanthropy than politically unconnected firms. We argue that political connections have countervailing effects on corporate philanthropy and that the study of publically traded firms (“public firms”) versus private unlisted firms (“private firms”) provides an opportunity to distinguish these effects. Using a unique dataset that encompasses both public and private firms in China, we find that political connections decrease corporate philanthropy among private firms but increase corporate philanthropy among public firms. The magnitude of these effects is also contingent on the size and age of a firm. The findings expand our understanding of corporate philanthropy. The novel approach of leveraging the distinctions between public and private firms creates a new perspective for advancing strategic management theories.

Keywords: corporate philanthropy, political connection, publically traded firms, private unlisted firms, China

Suggested Citation

Jia, Nan and Shi, Jing and Wang, Yongxiang, Do Politically Connected Firms Engage More or Less in Corporate Philanthropy? Evidence from Public and Private Firms in China (January 24, 2013). FIRN Research Paper, Available at SSRN: https://ssrn.com/abstract=2206435 or http://dx.doi.org/10.2139/ssrn.2206435

Nan Jia (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Jing Shi

Macquarie University ( email )

Eastern Rd.
North Ryde
Sydney, NSW 2109
Australia

HOME PAGE: http://https://researchers.mq.edu.au/en/persons/jing-shi

Yongxiang Wang

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

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