Regional Income Inequality, Social Capital and Corporate Giving

Abstract

This study examines whether and how regional income inequality affects donations by the firms located in the region. Drawing upon the literature on institutional logic of corporate social responsibility (CSR), we develop a concept of regional logics. We focus on the regional logics regarding the value toward wealth redistribution performed by business firms and measure it by regional income inequality. Analyses of 398 Chinese listed firms from 2011 to 2015 provide strong empirical support for the hypothesis that regional income inequality decrease the amount of corporate giving by firms in the region. Additionally, we explore the moderating effect of social capital on the main relationship. The results show that in regions with higher level of social capital, the negative effect of income inequality on corporate giving is weakened. This paper contributes to the field-level institutional logics of CSR, and complements our understandings of antecedents of corporate giving.