Beyond profits: The linkages between local embeddedness, social legitimacy, and corporate philanthropy in the mining industry

Abstract

Despite the growing body of research on corporate philanthropy, there remains a lack of understanding regarding how local embeddedness impacts the philanthropic activities of firms. Our study addresses this gap in the philanthropy literature by proposing and testing a model that elucidates this mechanism. Drawing on data from 166 firms operating in the mining industry, our findings indicate that local embeddedness has a positive effect on a firm's social legitimacy. However, we also discovered that this relationship is amplified when there is greater legal inefficiency. Additionally, our results demonstrate that a firm's social legitimacy serves as a mediator in the relationship between local embeddedness and corporate philanthropy. The theoretical and practical implications of these findings are discussed in detail.

Exploring the impact of digital accounting and digital zakat on improving business sustainability in the Middle East and Malaysia

“…By taking part in such initiatives, businesses demonstrate their dedication to enhancing social well-being and reducing their ecological impact, supporting their efforts to be more sustainable (Yáñez-Valdés and Guerrero, 2023). This participation promotes trust and goodwill among stakeholders by demonstrating social responsibility and a commitment to the welfare of the communities in which they operate (Adomako and Tran, 2023). Initiatives for sustainable community development also offer a forum for interaction with a variety of stakeholders, boosting satisfaction and enhancing the reputation of the brand (Ajina et al, 2020).…”