Title

Corporate Philanthropy and Financial Performance: The Roles of Social Expectations and Political Access

Publication Type

Journal Article

Version

Publisher’s Version

Publication Date

12-2011

Abstract

Corporate philanthropy is expected to positively affect firm financial performance because it helps firms gain sociopolitical legitimacy, which enables them to elicit positive stakeholder responses and to gain political access. The positive philanthropy-performance relationship is stronger for firms with greater public visibility and for those with better past performance, as philanthropy by these firms gains more positive stakeholder responses. Firms that are not government-owned or politically well connected were shown to benefit more from philanthropy, as gaining political resources is more critical for such firms. Empirical analyses using data on Chinese firms listed on stock exchanges from 2001 to 2006 support these arguments.

Keywords

corporate philanthrophy, political connections, China, sociopolitical legitimacy, stakeholders

Discipline

Business Administration, Management, and Operations | Finance and Financial Management

Research Areas

Finance

Publication

Academy of Management Journal

Volume

54

Issue

6

First Page

1159

Last Page

1181

ISSN

0001-4273

Identifier

10.5465/amj.2009.0548

Publisher

Academy of Management