Abstract
Charitable donations are an effective way for heavy-pollution industries to reduce their environmental reputation risk. In China, the communist party committees within corporations play a key role in decisions regarding charitable donations. However, relatively little is known about the relationship between the governance of corporate party committees and charitable donations. Using data from Chinese listed firms in heavy-pollution industries from 2013 to 2018, we found that corporate party committee governance enhanced the willingness of firms to donate and to increase the amount of their donations significantly. The effect on intention of charitable donations was pronounced for non-state-owned enterprises (NSOEs), whereas the effect on the amount of donations was pronounced for state-owned enterprises (SOEs). Party committee governance increased the amount of charitable donations in regions with a higher level of marketization, but it reduced the amount of charitable donations in firms/industries with a high degree of monopoly. Our findings provide insight for the decisive role of party committees in corporate charitable donations in heavy-pollution industries.
Highlights
Corporate party committees had a negative effect on willingness of a corporation to give charitable donations because the estimated coefficient of Dzz was 1.5748 with a t-statistic of 0.26, which was significant at the 1% level (Table 5)
This paper provides novel evidence of how corporate party committee governance affected charitable donations in heavy-pollution industries
Party committee governance increased the amount of charitable donations in the regions with a higher level of marketization, and the strength of the firm’s monopoly moderated the relationship negatively
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. For any company based in China, a party organization must be embedded in the corporate governance structure, which is an inevitable requirement This applies to heavy-pollution industries, such as coal, steel, and other fields, which are related to national security. There is a lack of studies on the influence of corporate party committee governance on charitable donations, in heavy-pollution enterprises. We extend current studies on the relationship between corporate party committee governance and charitable donations for specific industries This will be conducive to the sustainable development of heavy-pollution industries. We investigate the effect of the external macroenvironment on corporate charitable donations by examining two sub-samples: the market environment (marketization level) and the industry environment (monopoly strength) This provides insight into the policies of charitable donations within the heavy-pollution industries under different macro-environments.
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