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The Impact of Operational Diversity on Corporate Philanthropy: An Empirical Study of U.S. Companies

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  • Jean Kabongo
  • Kiyoung Chang
  • Ying Li

Abstract

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. Copyright Springer Science+Business Media B.V. 2013

Suggested Citation

  • Jean Kabongo & Kiyoung Chang & Ying Li, 2013. "The Impact of Operational Diversity on Corporate Philanthropy: An Empirical Study of U.S. Companies," Journal of Business Ethics, Springer, vol. 116(1), pages 49-65, August.
    • Handle: RePEc:kap:jbuset:v:116:y:2013:i:1:p:49-65
    DOI: 10.1007/s10551-012-1445-9
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    3. Raquel Garde Sánchez & Jesús Mauricio Flórez-Parra & María Victoria López-Pérez & Antonio Manuel López-Hernández, 2020. "Corporate Governance and Disclosure of Information on Corporate Social Responsibility: An Analysis of the Top 200 Universities in the Shanghai Ranking," Sustainability, MDPI, vol. 12(4), pages 1-22, February.
    4. Al-Shammari, Marwan & Rasheed, Abdul & Al-Shammari, Hussam A., 2019. "CEO narcissism and corporate social responsibility: Does CEO narcissism affect CSR focus?," Journal of Business Research, Elsevier, vol. 104(C), pages 106-117.
    5. Nooraisah Katmon & Zam Zuriyati Mohamad & Norlia Mat Norwani & Omar Al Farooque, 2019. "Comprehensive Board Diversity and Quality of Corporate Social Responsibility Disclosure: Evidence from an Emerging Market," Journal of Business Ethics, Springer, vol. 157(2), pages 447-481, June.
    6. Young Kyun Chang & Won-Yong Oh & Jee Hyun Park & Myoung Gyun Jang, 2017. "Exploring the Relationship Between Board Characteristics and CSR: Empirical Evidence from Korea," Journal of Business Ethics, Springer, vol. 140(2), pages 225-242, January.
    7. Lourdes Arco-Castro & Maria Victoria López-Pérez & Maria Carmen Pérez-López & Lázaro Rodríguez-Ariza, 2020. "Corporate philanthropy and employee engagement," Review of Managerial Science, Springer, vol. 14(4), pages 705-725, August.
    8. Mariasole Bannò & Emilia Filippi & Sandro Trento, 2023. "Women in top echelon positions and their effects on sustainability: a review, synthesis and future research agenda," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 181-251, March.
    9. Kiyoung Chang & Incheol Kim & Ying Li, 2014. "The Heterogeneous Impact of Corporate Social Responsibility Activities That Target Different Stakeholders," Journal of Business Ethics, Springer, vol. 125(2), pages 211-234, December.
    10. Elshandidy, Tamer & Bamber, Matthew & Omara, Hossam, 2024. "Across the faultlines: A multi-dimensional index to measure and assess board diversity," International Review of Financial Analysis, Elsevier, vol. 93(C).
    11. Truc (Peter) Do & Kathleen Herbohn, 2024. "The impact of board ethnic diversity and Chief Executive Officer role on corporate social responsibility," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(1), pages 575-605, March.
    12. Jenna J. Burke & Rani Hoitash & Udi Hoitash, 2019. "The Heterogeneity of Board-Level Sustainability Committees and Corporate Social Performance," Journal of Business Ethics, Springer, vol. 154(4), pages 1161-1186, February.
    13. Kiyoung Chang & Jean Kabongo & Ying Li, 2021. "Geographic proximity, long-term institutional ownership, and corporate social responsibility," Review of Quantitative Finance and Accounting, Springer, vol. 56(1), pages 297-328, January.
    14. 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.
    15. Giovanna Campopiano & Patricia Gabaldón & Daniela Gimenez-Jimenez, 2023. "Women Directors and Corporate Social Performance: An Integrative Review of the Literature and a Future Research Agenda," Journal of Business Ethics, Springer, vol. 182(3), pages 717-746, January.

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