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The new government–business relationship and corporate philanthropy: An analysis based on political motivation

Author

Listed:
  • Lin Zhou

    (Guangdong Polytechnic Normal University
    Jilin University)

  • Xiao Liu

    (Shanghai Institute of Tourism, Shanghai Normal University)

Abstract

There has long been debate about whether the motives for corporate philanthropy are selfish or altruistic in nature. This study takes A-share listed companies on the Shanghai and Shenzhen stock exchanges in China from 2016 to 2019 as the research object and analyzes China’s new government–business relationship based on institutional theory. The results show that the new government–business relationship, which is characterized by being close and unsullied, has a significant inhibitory effect on corporate philanthropy. To be specific, the closer and more unsullied the government–business relationship in the region where the firm is located, the lower its level of corporate philanthropy, thus supporting the hypothesis of selfish—and especially political—motivation. A heterogeneity analysis shows that compared with private enterprises and enterprises in areas with high levels of marketization, the new government–business relationship has a less inhibitory effect on the philanthropic efforts of state-owned enterprises and enterprises in areas with lower levels of marketization. Conditional testing shows that the purpose of corporate philanthropy is to obtain more economic resources such as bank loans, government subsidies, and tax incentives. Finally, the improvement in the government–business relationship reduces the economic resources that enterprises obtain from the government, thus indicating that the political motivation for corporate philanthropy will be mitigated after the change in that relationship. The results of this study clarify the actual motives underlying corporate philanthropy and provide empirical evidence for the government to reference when establishing and adjusting the government–business relationship.

Suggested Citation

  • Lin Zhou & Xiao Liu, 2024. "The new government–business relationship and corporate philanthropy: An analysis based on political motivation," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(3), pages 807-840, September.
    • Handle: RePEc:spr:eurasi:v:14:y:2024:i:3:d:10.1007_s40821-024-00269-4
    DOI: 10.1007/s40821-024-00269-4
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    References listed on IDEAS

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    More about this item

    Keywords

    New government–business relationship; Corporate philanthropy; Institutional theory; Empirical analysis;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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