TY - JOUR
T1 - Corporate Philanthropy and Tunneling
T2 - Evidence from China
AU - Chen, Jun
AU - Dong, Wang
AU - Tong, Jamie
AU - Zhang, Feida
PY - 2018/6/1
Y1 - 2018/6/1
N2 - 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.
AB - 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.
KW - China evidence
KW - Corporate philanthropy
KW - Tunneling
UR - http://www.scopus.com/inward/record.url?scp=84963720394&partnerID=8YFLogxK
U2 - 10.1007/s10551-016-3166-y
DO - 10.1007/s10551-016-3166-y
M3 - Article
AN - SCOPUS:84963720394
SN - 0167-4544
VL - 150
SP - 135
EP - 157
JO - Journal of Business Ethics
JF - Journal of Business Ethics
IS - 1
ER -