Abstract

This study examines how corporate donation is influenced by political connection in China, the biggest transition economy. Building on the resource dependence theory and agency theory, we develop the hypotheses between political connection and corporate donation. The analysis of 876 listed companies in China suggests that political connection improves corporate donation, including both donation enthusiasm and donation amount. Due to the raising power of local governments in China’s economic transition, the local political connection also provides motivations for corporate donation. These two relationships are even stronger when the company faces bigger risk of losing their political connections. Finally, the findings show that corporate donation has the positive impact on firm performance.

Keywords:

China, corporate social responsibility, donation, political connection, top management team, transition economy,

References

Competing interests

The authors have no competing interests.

Open Access Policy

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Copyright

The authors have no competing interests.