Effect of Directors' Social Network Centrality on Corporate Charitable Donation

Abstract

We compiled a social network of directors who were serving concurrently on the boards of several listed companies in China and analyzed the effect of the directors' social network centrality on corporate charitable donation. The results revealed that the directors' social network centrality had differing effects according to whether or not the enterprise was state-owned. Charitable donation of state-owned enterprises was not sensitive to directors' social network centrality, whereas the directors' social network centrality exerted a positive effect on charitable donation among enterprises that were not state-owned. These findings support the application of a political cost perspective to gain a better understanding of the mechanism of charitable donation.