The Impact Of Socio-Political Context And Government Control On Corporate Philanthropy And Firm Performance

DOI: 10.5176/2251-1997_AF18.199

Authors: S.S. Lam, Pauline H.Y. Hung and Samuel P.M. Choi

Abstract:

This study examines the impact of socio-political and government control on the relationship between philanthropy giving and firm performance. Using a sample of Hong Kong listed firms from 2011 to 2015, we find positive significant association between philanthropy giving and financial performance and the relationship is contingent on the socio-political factor and ownership structure. In particular, we find that corporate philanthropy tends to be negatively related to firm performance for state-owned enterprises suggesting that the corporate giving may hurt instead of bolster up financial performance of firms under government control.

Keywords: corporate philanthropy; firm performance; socio-political context; state-owned enterprise