[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v129y2015i2p341-361.html
   My bibliography  Save this article

Is Corporate Philanthropy Used as Environmental Misconduct Dressing? Evidence from Chinese Family-Owned Firms

Author

Listed:
  • Xingqiang Du
Abstract
In this study, I examine the hidden connection between corporate philanthropic giving and corporate environmental misconduct. Using survey data from Chinese family-owned firms, I provide strong and consistent evidence to show that corporate environmental misconduct is significantly positively associated with corporate philanthropic giving, suggesting that some Chinese family-owned firms act philanthropically to divert public attention from their environmentally unfriendly behavior. Moreover, the positive association between corporate environmental misconduct and corporate philanthropic giving is less pronounced for politically connected family-owned firms than for their counterparts. The above results are robust to various sensitivity tests. My findings suggest that environmental misconduct dressing may be an additional motivation for corporate philanthropic giving and that different dimensions of corporate social responsibility may be inherently inconsistent in the given institutional setting. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Xingqiang Du, 2015. "Is Corporate Philanthropy Used as Environmental Misconduct Dressing? Evidence from Chinese Family-Owned Firms," Journal of Business Ethics, Springer, vol. 129(2), pages 341-361, June.
    • Handle: RePEc:kap:jbuset:v:129:y:2015:i:2:p:341-361
    DOI: 10.1007/s10551-014-2163-2
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10551-014-2163-2
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-014-2163-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. John Bingham & W. Gibb Dyer & Isaac Smith & Gregory Adams, 2011. "A Stakeholder Identity Orientation Approach to Corporate Social Performance in Family Firms," Journal of Business Ethics, Springer, vol. 99(4), pages 565-585, April.
    2. Wenjing Li & Ran Zhang, 2010. "Corporate Social Responsibility, Ownership Structure, and Political Interference: Evidence from China," Journal of Business Ethics, Springer, vol. 96(4), pages 631-645, November.
    3. Fan, Joseph P.H. & Wong, T.J. & Zhang, Tianyu, 2007. "Politically connected CEOs, corporate governance, and Post-IPO performance of China's newly partially privatized firms," Journal of Financial Economics, Elsevier, vol. 84(2), pages 330-357, May.
    4. Adhikari, Ajay & Derashid, Chek & Zhang, Hao, 2006. "Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia," Journal of Accounting and Public Policy, Elsevier, vol. 25(5), pages 574-595.
    5. William Crampton & Dennis Patten, 2008. "Social Responsiveness, Profitability and Catastrophic Events: Evidence on the Corporate Philanthropic Response to 9/11," Journal of Business Ethics, Springer, vol. 81(4), pages 863-873, September.
    6. Richardson, Grant & Lanis, Roman, 2007. "Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia," Journal of Accounting and Public Policy, Elsevier, vol. 26(6), pages 689-704.
    7. Andrei Shleifer, 2004. "Does Competition Destroy Ethical Behavior?," American Economic Review, American Economic Association, vol. 94(2), pages 414-418, May.
    8. Usha C. V. Haley, 1991. "Corporate Contributions As Managerial Masques: Reframing Corporate Contributions As Strategies to Influence Society," Journal of Management Studies, Wiley Blackwell, vol. 28(5), pages 485-510, September.
    9. Chaney, Paul K. & Faccio, Mara & Parsley, David, 2011. "The quality of accounting information in politically connected firms," Journal of Accounting and Economics, Elsevier, vol. 51(1-2), pages 58-76, February.
    10. S. Zeng & X. Xu & H. Yin & C. Tam, 2012. "Factors that Drive Chinese Listed Companies in Voluntary Disclosure of Environmental Information," Journal of Business Ethics, Springer, vol. 109(3), pages 309-321, September.
    11. Jennifer C. Chen & Dennis M. Patten & Robin Roberts, 2008. "Corporate Charitable Contributions: A Corporate Social Performance or Legitimacy Strategy?," Journal of Business Ethics, Springer, vol. 82(1), pages 131-144, September.
    12. International Finance Corporation & World Bank, 2012. "Doing Business 2012 : Doing Business in a More Transparent World," World Bank Publications - Books, The World Bank Group, number 5907.
    13. Pursey P. M. A. R. Heugens & Cees B. M. Van Riel & Frans A. J. Van Den Bosch, 2004. "Reputation Management Capabilities as Decision Rules," Journal of Management Studies, Wiley Blackwell, vol. 41(8), pages 1349-1377, December.
    14. Pursey P. M. A. R. Heugens & Muel Kaptein & J. (Hans) van Oosterhout, 2008. "Contracts to Communities: A Processual Model of Organizational Virtue," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 100-121, January.
    15. Jun Su & Jia He, 2010. "Does Giving Lead to Getting? Evidence from Chinese Private Enterprises," Journal of Business Ethics, Springer, vol. 93(1), pages 73-90, April.
    16. Stephen J. Brammer & Stephen Pavelin & Lynda A. Porter, 2009. "Corporate Charitable Giving, Multinational Companies and Countries of Concern," Journal of Management Studies, Wiley Blackwell, vol. 46(4), pages 575-596, June.
    17. Stephen Brammer & Andrew Millington, 2008. "Does it pay to be different? An analysis of the relationship between corporate social and financial performance," Strategic Management Journal, Wiley Blackwell, vol. 29(12), pages 1325-1343, December.
    18. W. Gibb Dyer Jr. & David A. Whetten, 2006. "Family Firms and Social Responsibility: Preliminary Evidence from the S&P 500," Entrepreneurship Theory and Practice, , vol. 30(6), pages 785-802, November.
    19. Asim Ijaz Khwaja & Atif Mian, 2005. "Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1371-1411.
    20. Alan Muller & Gail Whiteman, 2009. "Exploring the Geography of Corporate Philanthropic Disaster Response: A Study of Fortune Global 500 Firms," Journal of Business Ethics, Springer, vol. 84(4), pages 589-603, February.
    21. Stephen Brammer & Andrew Millington, 2004. "The Development of Corporate Charitable Contributions in the UK: A Stakeholder Analysis," Journal of Management Studies, Wiley Blackwell, vol. 41(8), pages 1411-1434, December.
    22. Louis Amato & Christie Amato, 2007. "The Effects of Firm Size and Industry on Corporate Giving," Journal of Business Ethics, Springer, vol. 72(3), pages 229-241, May.
    23. Claessens, Stijn & Feijen, Erik & Laeven, Luc, 2008. "Political connections and preferential access to finance: The role of campaign contributions," Journal of Financial Economics, Elsevier, vol. 88(3), pages 554-580, June.
    24. Daryl Koehn & Joe Ueng, 2010. "Is philanthropy being used by corporate wrongdoers to buy good will?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(1), pages 1-16, February.
    25. Alan Muller & Gail Whiteman, 2009. "Exploring the Geography of Corporate Philanthropic Disaster Response: A Study of Fortune Global 500 Firms," Journal of Business Ethics, Springer, vol. 84(4), pages 605-605, February.
    26. Mark P. Sharfman & Chitru S. Fernando, 2008. "Environmental risk management and the cost of capital," Strategic Management Journal, Wiley Blackwell, vol. 29(6), pages 569-592, June.
    27. Larcker, David F. & Rusticus, Tjomme O., 2010. "On the use of instrumental variables in accounting research," Journal of Accounting and Economics, Elsevier, vol. 49(3), pages 186-205, April.
    28. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    29. MARA FACCIO & RONALD W. MASULIS & JOHN J. McCONNELL, 2006. "Political Connections and Corporate Bailouts," Journal of Finance, American Finance Association, vol. 61(6), pages 2597-2635, December.
    30. Louis Amato & Christie Amato, 2012. "Retail Philanthropy: Firm Size, Industry, and Business Cycle," Journal of Business Ethics, Springer, vol. 107(4), pages 435-448, June.
    31. Ran Zhang & Jigao Zhu & Heng Yue & Chunyan Zhu, 2010. "Corporate Philanthropic Giving, Advertising Intensity, and Industry Competition Level," Journal of Business Ethics, Springer, vol. 94(1), pages 39-52, June.
    32. Stephen J. Brammer & Stephen Pavelin & Lynda A. Porter, 2008. "Corporate charitable giving, multinational companies and countries of concern," Economics Discussion Papers em-dp2008-61, Department of Economics, University of Reading.
    33. Mike Adams & Philip Hardwick, 1998. "An Analysis of Corporate Donations: United Kingdom Evidence," Journal of Management Studies, Wiley Blackwell, vol. 35(5), pages 641-654, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lin, Karen Jingrong & Tan, Jinsong & Zhao, Liming & Karim, Khondkar, 2015. "In the name of charity: Political connections and strategic corporate social responsibility in a transition economy," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 327-346.
    2. Lei Xu & Xiaoning Guo & Yan Liu & Xiaochen Sun & Jie Ji, 2022. "How Does Corporate Charitable Giving Affect Enterprise Innovation? A Literature Review and Research Directions," Sustainability, MDPI, vol. 14(23), pages 1-21, November.
    3. Arthur Gautier & Anne-Claire Pache, 2015. "Research on Corporate Philanthropy: A Review and Assessment," Journal of Business Ethics, Springer, vol. 126(3), pages 343-369, February.
    4. Heng Liu & Jin-hui Luo & Victor Cui, 2018. "The Impact of Internationalization on Home Country Charitable Donation: Evidence from Chinese Firms," Management International Review, Springer, vol. 58(2), pages 313-335, April.
    5. Long, Cheryl & Yang, Jin, 2016. "What explains Chinese private entrepreneurs' charitable behaviors?—A story of dynamic reciprocal relationship between firms and the government," China Economic Review, Elsevier, vol. 40(C), pages 1-16.
    6. Kellie Liket & Ana Simaens, 2015. "Battling the Devolution in the Research on Corporate Philanthropy," Journal of Business Ethics, Springer, vol. 126(2), pages 285-308, January.
    7. Alan Muller & Gail Whiteman, 2016. "Corporate Philanthropic Responses to Emergent Human Needs: The Role of Organizational Attention Focus," Journal of Business Ethics, Springer, vol. 137(2), pages 299-314, August.
    8. Xingqiang Du, 2017. "Religious Belief, Corporate Philanthropy, and Political Involvement of Entrepreneurs in Chinese Family Firms," Journal of Business Ethics, Springer, vol. 142(2), pages 385-406, May.
    9. Ran Zhang & Jigao Zhu & Heng Yue & Chunyan Zhu, 2010. "Corporate Philanthropic Giving, Advertising Intensity, and Industry Competition Level," Journal of Business Ethics, Springer, vol. 94(1), pages 39-52, June.
    10. Shuo Wang & Yuhui Gao & Gerard Hodgkinson & Denise Rousseau & Patrick Flood, 2015. "Opening the Black Box of CSR Decision Making: A Policy-Capturing Study of Charitable Donation Decisions in China," Journal of Business Ethics, Springer, vol. 128(3), pages 665-683, May.
    11. Wu, Bao & Jin, Chenfei & Monfort, Abel & Hua, Danni, 2021. "Generous charity to preserve green image? Exploring linkage between strategic donations and environmental misconduct," Journal of Business Research, Elsevier, vol. 131(C), pages 839-850.
    12. Frederik Plewnia & Edeltraud Guenther, 2017. "The benefits of doing good: a meta-analysis of corporate philanthropy business outcomes and its implications for management control," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(3), pages 347-376, October.
    13. Leon Zolotoy & Don O’Sullivan & Jill Klein, 2019. "Character Cues and Contracting Costs: The Relationship Between Philanthropy and the Cost of Capital," Journal of Business Ethics, Springer, vol. 154(2), pages 497-515, January.
    14. Xingqiang Du & Yingying Chang & Quan Zeng & Yingjie Du & Hongmei Pei, 2016. "Corporate environmental responsibility (CER) weakness, media coverage, and corporate philanthropy: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 33(2), pages 551-581, June.
    15. Sihai Li & Huiying Wu & Xianzhong Song, 2017. "Principal–Principal Conflicts and Corporate Philanthropy: Evidence from Chinese Private Firms," Journal of Business Ethics, Springer, vol. 141(3), pages 605-620, March.
    16. Xueyan Dong & Jingyu Gao & Sunny Li Sun & Kangtao Ye, 2021. "Doing extreme by doing good," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 291-315, March.
    17. Jun Chen & Wang Dong & Jamie Tong & Feida Zhang, 2018. "Corporate Philanthropy and Tunneling: Evidence from China," Journal of Business Ethics, Springer, vol. 150(1), pages 135-157, June.
    18. Yongqiang Gao & Ya Lisa Lin & Haibin Yang, 2017. "What’s the value in it? Corporate giving under uncertainty," Asia Pacific Journal of Management, Springer, vol. 34(1), pages 215-240, March.
    19. Liu, Qigui & Tang, Jinghua & Tian, Gary Gang, 2013. "Does political capital create value in the IPO market? Evidence from China," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 395-413.
    20. Emmanuelle Nys & Amine Tarazi & Irwan Trinugroho, 2013. "Political Connections, Bank Deposits, and Formal Deposit Insurance: Evidence from an Emerging Economy," Working Papers hal-00916513, HAL.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:129:y:2015:i:2:p:341-361. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.