The Interdependence of Public and Private Stakeholder Influence: A Study of Political Patronage and Corporate Philanthropy in China

Advances in Strategic Management, Forthcoming

33 Pages Posted: 16 Feb 2018

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: February 5, 2018

Abstract

We argue that the influence of public stakeholders (the state) and private stakeholders (non-state social or economic stakeholders) on corporate philanthropy is interdependent, in that satisfying the state may increase the degree of scrutiny and pressure exerted by private stakeholders on the firm, particularly in institutional environments that place few checks and balances on the power of the state-thus creating suspicion that political patronage shelters firms' social and moral wrongdoing. To test this theory, we examine the circumstances under which politically patronized firms engage more (or less) in corporate philanthropy. Utilizing a dataset that encompasses both publically traded and unlisted private firms in China, we find that corporate philanthropy is negatively associated with political patronage among unlisted firms but positively associated with political patronage among listed firms. These results are consistent with the predictions made based on our theoretical arguments. This paper aims to foster further discussion regarding the interdependence of the influences exerted by different stakeholders on firms.

Keywords: corporate philanthropy, corporate social responsibility (CSR), stakeholder theory, interdependence, political patronage, political connection, China

Suggested Citation

Jia, Nan and Shi, Jing and Wang, Yongxiang, The Interdependence of Public and Private Stakeholder Influence: A Study of Political Patronage and Corporate Philanthropy in China (February 5, 2018). Advances in Strategic Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3092504

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
90
Abstract Views
632
rank
318,466
PlumX Metrics