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Political Connection, Ownership Structure, and Corporate Philanthropy in China: A Strategic-Political Perspective

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  • Sihai Li
  • Xianzhong Song
  • Huiying Wu

Abstract

This paper investigates whether philanthropic giving decisions and amount of charitable giving are related to firms’ political connections and ownership type. To this end, Chinese firms listed on either the Shenzhen or Shanghai stock exchange between 2004 and 2011 are examined, where government interference in the business sector is prevalent, state ownership structure is dominant, and corporate political connections prevail. Our analyses show (1) a significant and positive relationship between political connections and the likelihood and extent of firm contributions; (2) a significant and negative relationship between state ownership and extent of firm contributions; and (3) a stronger relationship between political connections and corporate philanthropy in non-state-owned firms. These findings with regard to the relationship between corporate giving, political connections, and ownership type have important implications for understanding corporate giving behavior in China and in emerging markets in general. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Sihai Li & Xianzhong Song & Huiying Wu, 2015. "Political Connection, Ownership Structure, and Corporate Philanthropy in China: A Strategic-Political Perspective," Journal of Business Ethics, Springer, vol. 129(2), pages 399-411, June.
    • Handle: RePEc:kap:jbuset:v:129:y:2015:i:2:p:399-411
    DOI: 10.1007/s10551-014-2167-y
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    References listed on IDEAS

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