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How does the turnover of local officials make firms more charitable? A comprehensive analysis of corporate philanthropy in China

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  • Liu, Wei
  • De Sisto, Marco
  • Li, Wen Helena

Abstract

Building on institutional theory, this study investigates the impact of local officials' turnover on corporate philanthropy in China. Using data from Chinese listed firms from 2000–2015, we find that when city-level officials are replaced, firms increase the amount of money they donate. We also note that such positive relationship is stronger when the turnover of a local secretary is unexpected or when the firm experiences stronger performance than in the prior year. Further in-depth analysis shows that the positive impact of the turnover of local officials becomes more salient when firms have high levels of state ownership.

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  • Liu, Wei & De Sisto, Marco & Li, Wen Helena, 2021. "How does the turnover of local officials make firms more charitable? A comprehensive analysis of corporate philanthropy in China," Emerging Markets Review, Elsevier, vol. 46(C).
    • Handle: RePEc:eee:ememar:v:46:y:2021:i:c:s156601412030073x
    DOI: 10.1016/j.ememar.2020.100748
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    9. Ji, Xiaoqing & Liu, Shuai & Lang, Jingyi, 2022. "Assessing the impact of officials' turnover on urban economic efficiency: From the perspective of political promotion incentive and power rent-seeking incentive," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    10. Zhi Su & Bo Yi & Linan Wang, 2022. "Is corporate philanthropy a pretext for executives' excess perk consumption? Evidence from China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4010-4027, December.

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    More about this item

    Keywords

    Corporate philanthropy; Corporate social responsibility; Political turnover; Political risk; Institutional theory; China;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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