Corporate Philanthropy and Tunneling: Evidence from China

Jun Chen, Wang Dong, Jamie Tong, Feida Zhang

Research output: Contribution to journalArticlepeer-review

48 Citations (Scopus)


This paper examines the association between corporate philanthropy and tunneling by controlling shareholders. Using a unique dataset from China, the paper finds evidence that firms donating more are less likely to tunnel. The negative association between philanthropy and tunneling is stronger when firms are faced with more severe agency conflicts, as indicated by lower largest shareholding, fewer growth opportunities, lower state ownership, and weaker product market competition. The results suggest that companies engaging in philanthropy have incentives to enhance their reputations and improve their relationships with stakeholders.

Original languageEnglish
Pages (from-to)135-157
Number of pages23
JournalJournal of Business Ethics
Issue number1
Publication statusPublished - 1 Jun 2018


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