Abstract
We examined whether corporate charitable giving (CCG) in China benefits corporate performance (CP) in terms of sales growth (SG), return on asset (ROA), return on equity (ROE), and Tobin’s Q (TQ), and revealed several findings. First, testing shows variation in the impact of CCG on CP. Whereas the ratio of corporate charitable giving (RCCG) to total sales revenue does not significantly enhance SG, ROA, and ROE, it is positively related to TQ. Second, the positive relationship between RCCG and TQ originates from non-state-owned firms (NSOFs) rather than state-owned firms (SOFs). Third, Chinese firms may use CCG as traditional philanthropy to enhance long-term performance instead of strategically using it to generate short-term performance. Lastly, an inverted U-shaped relationship exists between RCCG and TQ, especially for NSOFs.
Highlights
As corporate charitable giving (CCG) is considered an essential tactic in managing political and business relationships, some studies have examined whether CCG can help improve corporate performance (CP)
We use sales growth rate (SG), return on asset (ROA), return on equity (ROE), and Tobin’s Q (TQ) to measure firm performance
Current studies about CCG in China generally focus on the motivation for CCG [11,16,17], though a few studies have attempted to evaluate whether CCG may influence CP in China [10,22,34]
Summary
As corporate charitable giving (CCG) is considered an essential tactic in managing political and business relationships, some studies have examined whether CCG can help improve corporate performance (CP). We looked at longitudinal data collected from Chinese publicly listed firms between 2003 and 2016 to provide a comprehensive understanding of the effect of CCG on long-term CP and its differentiation between SOFs and NSOFs in China. Empirical test results from this study should lead to a better understanding of the extent to which CCG impacts on CP are different in China’s SOFs and NSOFs. The purpose of this study was to explore CCG’s impact on Chinese firm CP through an analysis of empirical data. The findings from this study shed light on the relationship between CCG and long-term CP among the different ownership firms in China, outlining important managerial implications, and contribute to the finance research literature by extending Griffin and Mahon’s model to understanding the link between corporate social performance and corporate financial performance in China’s state ownership and corporate governance firms.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
