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Profit maximisation vs. agency: an analysis of charitable giving by UK firms

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  • Stephen Brammer
  • Andrew Millington

Abstract

The charitable giving of a large sample of publicly quoted UK firms is analysed within a model that explores the profit maximisation and managerial utility enhancement motives for giving. The empirical method draws a distinction between the decision to participate in giving and the determination of the amount of corporate contributions. Firm size and advertising intensity are found to be positively associated with the probability of participation in giving. Stricter corporate governance and the rate of directors' remuneration are negatively related to the probability of participation. Among givers, the rate of giving is related positively to R&D intensity, the rate of directors' remuneration, and corporate profitability and negatively to firm indebtedness. Copyright 2005, Oxford University Press.

Suggested Citation

  • Stephen Brammer & Andrew Millington, 2005. "Profit maximisation vs. agency: an analysis of charitable giving by UK firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(4), pages 517-534, July.
    • Handle: RePEc:oup:cambje:v:29:y:2005:i:4:p:517-534
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    File URL: http://hdl.handle.net/10.1093/cje/bei036
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    Cited by:

    1. 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.
    2. 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.
    3. Marek Halada, 2021. "Tax, financial and macroeconomic factors of corporate giving in the context of the Czech economy [Daňové, finanční a makroekonomické faktory firemního dárcovství v podmínkách české ekonomiky]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2021(1), pages 37-51.
    4. Rui Fukumoto & Yuji Genda & Mikiko Ishikawa, 2018. "Characteristics of Corporate Contributions to the Recovery of Regional Society from the Great East Japan Earthquake Disaster," Sustainability, MDPI, vol. 10(6), pages 1-36, May.
    5. Ran Zhang & Zabihollah Rezaee & Jigao Zhu, 2010. "Corporate Philanthropic Disaster Response and Ownership Type: Evidence from Chinese Firms’ Response to the Sichuan Earthquake," Journal of Business Ethics, Springer, vol. 91(1), pages 51-63, January.
    6. Bozzolan, Saverio & Fabrizi, Michele & Mallin, Christine A. & Michelon, Giovanna, 2015. "Corporate Social Responsibility and Earnings Quality: International Evidence," The International Journal of Accounting, Elsevier, vol. 50(4), pages 361-396.
    7. Min Zhang & Lijun Ma & Jun Su & Wen Zhang, 2014. "Do Suppliers Applaud Corporate Social Performance?," Journal of Business Ethics, Springer, vol. 121(4), pages 543-557, June.
    8. repec:prg:jnlcfu:v:2021:y:2021:i:1:id:554 is not listed on IDEAS
    9. Keling Wang & Chien-Pang Lin & Ming-Hsiang Chen & Evelina Gillard, 2018. "The impact of tourism firm’s philanthropy decision on its business objective," Tourism Economics, , vol. 24(5), pages 503-509, August.

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