Abstract
This paper investigates whether and how corporate giving is affected by a firm’s perceived degree of environmental uncertainty in the context of a transition economy. Evidence from a nationwide survey of private firms across China suggests that both regulatory uncertainty and market uncertainty in a transition economy motivate firms to conduct corporate giving. Further, a firm’s political ties and financial performance alleviate its response to environment pressures. Specifically, both political ties and financial performance reduce the impact of regulatory uncertainty on both giving probability and amount, but neither affects market uncertainty’s impact. This study illustrates the role of environmental uncertainty in driving corporate social behavior among Chinese private firms, and provides valuable insights for corporate giving in other transition economies.
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Notes
Private-owned enterprises in China are defined as enterprises in which assets are owned by individuals and have employed eight or more people. There are also some private firms (GeTiHu) that employ less than eight employees. Our sample includes both private enterprises and a few GeTiHu.
The research team was formed by a joint force of the United Front Work Department (UFWD) of the Central Committee of the Communist Party of China (CPC), the All-China Federation of Industry and Commerce (ACFIC), the State Administration for Industry and Commerce of China (SAICC), and the China Private Economy Association (CPEA).
The response rate of this survey is very high but we believe it should be natural given the high publicity and good reputation of this series of surveys among Chinese POEs, and the direct interview procedure also contributes to the high response rate.
RMB is the abbreviation of Renminbi, the proper name for Chinese currency. According to the foreign exchange rate at the end of 2007, 1 US dollar equals approximately 7.3 RMB on average.
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This research was supported by research grants at the National Natural Science Foundation of China (NSFC) (No. 71372131, No 71428005, No 71531009, No 71232012).
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Gao, Y., Lin, Y.L. & Yang, H. What’s the value in it? Corporate giving under uncertainty. Asia Pac J Manag 34, 215–240 (2017). https://doi.org/10.1007/s10490-016-9478-8
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DOI: https://doi.org/10.1007/s10490-016-9478-8