Military top executives and corporate philanthropy: Evidence from China

How do industry and province attributes impact corporate contribution to poverty alleviation: A multilevel analysis

This study employs a multilevel model, nesting firm observations within industry and province groups, to investigate the influences on corporate contributions to poverty alleviation while considering the industrial and provincial contexts. Using a sample of Chinese firms listed in Shanghai and Shenzhen Stock Exchanges between 2016 and 2019, we find that Herfindah-Hirschman Index (HHI) does not affect corporate contribution. The results show a significantly negative relationship between industry dynamism and a firm's substantial poverty contributions, as well as a significantly positive relationship between number of state-owned enterprises (SOEs) in industry and the likelihood and extent of a firm's contributions. Moreover, a firm's likelihood to participate in anti-poverty activities and make substantial contributions is affected by more intense government intervention and lower per capita GDP. A province's poverty rate is positively associated with the extent of corporate investments in poverty alleviation. Additional analyses note that firms competitive in an industry that is less dynamic environment are more likely to invest funds into poverty alleviation instead of material contribution. Moreover, for firms headquartered in an industry with more SOEs and in provinces with a stronger government, a higher poverty rate and lower per capita GDP mean it is more likely for them to make both monetary and material contributions for anti-poverty campaigns.

Military Experience and Individual Entrepreneurship—Imprinting Theory Perspective: Empirical Evidence From China

Military experience, as a special early experience exerts a very profound impact on individual decision making. This paper investigates the impact of military experience on male labor force entrepreneurial choices and its underlying mechanisms, using the 2014 to 2016 China Labor-force Dynamics Survey data. It is found that military experience significantly reduces the probability of individual entrepreneurship. The analysis of the influence mechanism shows that military experience inhibits survival entrepreneurship mainly by increasing employment opportunities in state-owned units, increasing the probability of becoming a member of the Communist Party of China(CPC), and accumulating human capital. This paper also finds that the inhibitory effect of military experience on individual entrepreneurship varies across household registration groups and is more significant for laborers with non-agricultural household. This paper not only reveals the impact of the military experience on individual entrepreneurship choices, but also provides empirical evidence for the development of innovation and entrepreneurship policies in emerging economies.

Self-interest or altruism: Entrepreneurs' military experience and the motivation of corporate philanthropic donations

This study aims to explore the motivation of corporate philanthropic donations through investigating the impact of entrepreneurs' military experience. Based on the data from the 12th Chinese privately owned enterprises survey, this study finds that entrepreneurs' military experience has a positive impact on corporate philanthropic donations and the result keeps consistent after a series of robustness tests. Further, corporate financing constraints do not significantly influence the relationship between entrepreneurs' military experience and corporate philanthropic donations, while return on equity (ROE) strengthens the relationship. Therefore, entrepreneurs with military experience still donate even if their firms suffer from financial constraints. When firms achieve higher ROE, they will donate more. The findings suggest that the donations of firms with military entrepreneurs are more likely to be altruistic, enriching the understanding of the motivation of corporate philanthropic donations.

Economic policy uncertainty and corporate donation: evidence from private firms in Korea

This study examines the association between economic policy uncertainty (EPU) and private firms’ corporate donations. Based on resource constraints and the conservation of resources (COR) theory, we argue that private firms are constantly facing resource constraints and their resource conservation motive becomes apparent when EPU is heightened. Therefore, we expect that corporate donations are negatively related to EPU. Using audited corporate donations from 48,903 private firms in Korea during 2002–2019, we find that private firms’ donations are negatively related to EPU. We find that private firms operating in more competitive conditions increase their donations, but this positive association between market competition and donations is moderated by EPU. We find that private firms’ donations increased when the progressive party is in power, but this positive relationship is also moderated by EPU. Our results suggest that firms reduce their level of corporate giving to conserve resources as a precautionary saving motive when they face higher EPU. Our paper contributes to the strand of literature on corporate donations and EPU by providing evidence that EPU significantly affects private firms’ donations. We also find that firms’ strategic motives and political pressure to engage in corporate donations are moderated by EPU.

The philanthropic response of substantive and symbolic corporate social responsibility strategies to COVID-19 crisis: Evidence from China

The COVID-19 epidemic broke out in China in January 2020, which triggered the largest wave of corporate philanthropic donations since the 2008 Sichuan earthquake. Based on A-share listed firms in the Shanghai and Shenzhen stock exchanges in 2020, we study whether substantive and symbolic corporate social responsibility (CSR) strategies affect corporate philanthropic responses during the COVID-19 crisis. We use the lagged annual donation and technical dimension scores (T scores) of rankins ratings (RKS) as proxies of CSR performance and CSR disclosure and then define the CSR gap as the gap between the two. The results show that substantive and symbolic strategies cause firms to have material differential responses in the COVID-19 crisis. Specifically, the CSR gap is negatively related to the possibility and the level of crisis donation. In addition, (1) this difference is more pronounced in the earlier period of the COVID-19 crisis; (2) the negative correlation is more pronounced in private firms; and (3) the crisis donation of firms with either strategy obtains no different response from the capital market. Our evidence suggests that the established CSR strategy influences the substantive response of Chinese firms to public emergencies, but their substantive response does not result in different reactions in the capital market.

Does Entrepreneurs’ Military Experience Promote Corporate Environmental Investment? Evidence from Chinese Private Firms

Although it is well established that the military experience of top executives has a profound influence on firms’ decisions, empirical evidence on how military experience matters to corporate environmental investment has been scarce. Drawn on imprinting theory and upper echelon theory, this study examines the impact of entrepreneurs’ military experience on corporate environmental investment. Using a nationwide survey of Chinese private firms, we find that entrepreneurs’ military experience significantly promotes corporate environmental investment. Further, the positive effect is more pronounced for firms with entrepreneurs who have experienced a wartime atmosphere and those located in regions with more minor public environmental concerns. Our study extends the literature on the determinants of corporate environmental investment and the economic consequences of individual military experience. Moreover, this also provides practical insights for policymakers on how to implement environmental governance and promote ecological construction.

Busting the ‘Princeling’? Demystifying the Effect of Corporate Depoliticization on Green Innovation: The Moderating Effect of Politician Turnover

China’s anticorruption efforts and depoliticized provisions trigger government officials to resign from firms, terminating corporate political connections established through managers. This paper addresses corporate depoliticization and its effect on firms’ green strategies. We disentangled how and why depoliticized firms actively take on green innovation and the moderating effect of politician turnover on the above relationship. This paper utilized the data related to China’s privately operated firms from 2008 to 2017 to test its hypothesis. Using the methods of propensity score matching (PSM) and difference-in-difference (DID) to mitigate endogeneity issues, the results indicate that (1) corporate depoliticization can foster green innovation; (2) the exploration of the boundary condition of politician turnover shows that the positive relationship between corporate depoliticization and green innovation is enhanced when depoliticized firms have experienced the changes of government officials; (3) anticorruption shocks can significantly and positively affect green innovation when interacted with a firm with depoliticization. These findings enrich corporate depoliticization and green innovation research.

Inward FDI spillovers and emerging multinationals’ outward FDI in two directions

Inward foreign direct investment (IFDI) carries critical implications for emerging market multinational enterprises’ (EMNEs’) outward foreign direct investment (OFDI). While extant research provides evidence for the positive linkage between IFDI and EMNEs’ OFDI, less is known about the directionality of such OFDI—where to go. This study aims to extend the IFDI-OFDI linkage by differentiating EMNEs’ upward and downward OFDI (i.e., OFDI projects in more and less advanced host countries than their home markets). Using panel data on 1334 Chinese multinationals, I find that IFDI promotes EMNEs’ upward OFDI, but this effect is weakened by state ownership and industry competition. Moreover, my findings show that although IFDI is not related to EMNEs’ downward OFDI in general, their linkage becomes positive in the conditions of higher state ownership or weaker industry competition. This study advances our understanding of the directionality (i.e., where to go) of EMNEs’ OFDI in the face of IFDI spillovers.

Does Having a Critical Mass of Women on the Board Result in More Corporate Environmental Actions? Evidence From China

Arguments based on ethical sensitivity differences, gender-based functional differences, and gender discrimination suggest that having more women on the board of directors improves corporate environmental actions (CEA). However, empirical evidence of this relationship has provided inconsistent results. To explore this inconsistency, we draw on critical mass theory to examine how women on boards influence CEA. Using a sample of Chinese listed firms during 2010–2016, we find that firms with a critical mass of at least three female directors on their boards engage in both higher quality and faster speed of environmental actions. In addition, we find that government monitoring (as a formal institution) positively moderates this relationship. We also find that local religious ideology (as an informal institution) positively moderates the relationship between critical mass of women on the boards and CEA speed. Our findings provide insights about gender diversity on boards to corporations and policymakers.

To be more philanthropic when joining the government-controlled business association? Evidence from Chinese private firms

Purpose

The purpose of this paper is to investigate whether and how affiliation with the government-controlled business association, namely, China Federation of Industry and Commerce (CFIC), affects corporate philanthropy in an emerging market.

Design/methodology/approach

Through an analysis of survey data gathered from Chinese private firms, this paper conducts multiple regressions to examine the impact of the CFIC membership on corporate philanthropy.

Findings

Empirical results show that the CFIC membership of private entrepreneurs is significantly positively associated with corporate philanthropy. Moreover, this study finds that the provincial marketization level and the firm Communist Party branch attenuate the positive association between CFIC membership and corporate philanthropy, indicating that the effect of CFIC on corporate philanthropy is more pronounced in regions with lower marketization level and firms without Communist Party branch. The findings are robust to various alternate measures of corporate philanthropy and remain valid after controlling for potential endogeneity.

Practical implications

Firms will be more active in corporate philanthropy to respond to the government’s governance appeal when they join the CFIC. This highlights the implications of political connections and in particular on the value of government-controlled business associations in the Chinese business world.

Originality/value

This study extends the literature on the determinants of corporate philanthropy and deepens the theoretical understanding of the governance role of business association with Chinese characteristics.