Philanthropic disaster relief giving as a response to institutional pressure: Evidence from China

Abstract

a b s t r a c tThis paper investigates if firms under high institutional pressure donate more to disaster relief than firms under lower institutional pressure. By taking Chinese listed companies' donations to May 12, 2008 Wenchuan earthquake as the sample, this research finds that large firms and firms who have political ties donate a significant more to disaster relief than smaller firms and firms who do not have political ties. But the findings indicate that state-owned enterprises (SOEs) donate no more than non SOEs, and service companies donate significantly less than non-service companies. The results of this research partly support the institutional point of view of corporate philanthropy. Firms under high institutional pressure are more likely to donate more than firms facing lower institutional pressure.

Government Intervention, Peers’ Giving and Corporate Philanthropy: Evidence from Chinese Private SMEs

“…Firms with high levels of advertising intensity are more visible and thus more likely to support social causes (Wang and Qian 2011;Zhang et al 2010). Firms with political ties, according to our resource dependency argument mentioned earlier, tend to donate more to social causes than firms without such ties (Gao 2011). Finally, industry matters as firms in industries with high public contact tend to put more resources to support charity (Useem 1988).…”

“…Alternatively, some see CP as a response to increasing social pressures and expectations (Gao 2011;Husted and Allen 2006;Sethi 2003), which originate from a range of stakeholder groups, including customers, communities, employees, shareholders, and governments (Sethi 2003). Many corporations stand ready to face rising social demands (Husted and Allen 2006).…”

“…Yet, research on their influence is very sketchy. The few studies that dealt with such stakeholders (Gao 2011;Marquis et al 2007;Wang and Qian 2011) focused mainly on large corporations. CP behavior of SMEs is still to be investigated, in particular in developing countries such as China (Moore and Spence 2006).…”

Does CSR practice pay off in East Asian firms? A meta-analytic investigation

“…For example, citizenship and employee commitment were found to be positively related in China (Chun, 2009). Philanthropic disaster relief was found to positively impact firm profitability in China (Gao, 2011). CSR (both equalweighted and stakeholder-weighted CSR indexes) was found to be positively related with business performance in Korea (Choi et al, 2010).…”

Corporate Philanthropy in Contemporary China: A Case of Rural Compulsory Education Promotion

“…How corporations and private entrepreneurs engage in philanthropy to benefit the society, and whether their strategies are effective and/or efficient are left unexplored. Recently, after the disastrous Wenchuan earthquake (2008), a few studies explored corporations' roles in disaster relief (Gao et al 2012;Gao 2011). However, responding to one traumatic event is different from meeting the long-term needs of the society.…”