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One Thorn of Experience, Corruption Atmosphere, and Corporate Philanthropy

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On Informal Institutions and Accounting Behavior

Part of the book series: Contributions to Finance and Accounting ((CFA))

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Abstract

“One thorn of experience is worth a whole wilderness of warning”. In China, the Cultural Revolution as a great historical event has affected behavioral patterns of several generations of Chinese people. Against this context, this chapter examines the impacts of the Cultural Revolution experiences of directors on corporate philanthropy and further investigates the moderating effect of corruption atmosphere across provinces in China on above relation. The findings show that the Cultural Revolution experiences of directors significantly negatively affect corporate philanthropy, implying that directors experiencing the Cultural Revolution are inclined to be less socially ethical and benevolent. Moreover, provincial corruption atmosphere attenuates the negative relation between the Cultural Revolution experiences of directors and corporate philanthropy. A variety of sensitivity tests using alternative measures about the Cultural Revolution experiences of directors and corporate philanthropy suggest that the findings are robust, and further the conclusions still stand after addressing the endogeneity problem.

One thorn of experience is worth a whole wilderness of warning.

James Russell Lowell

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Notes

  1. 1.

    For a director who is from Hong Kong, Taiwan, Macau, or an overseas Chinese (a Chinese with foreign nationality), the score for the director is calculated based on the same method if he/she lived in mainland China during the period of 1966–1976 (via the Resume provided in CSMAR).

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  1. Accounting Department, Xiamen University, Xiamen, Fujian, China

    Xingqiang Du

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Correspondence to Xingqiang Du .

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Du, X. (2021). One Thorn of Experience, Corruption Atmosphere, and Corporate Philanthropy. In: On Informal Institutions and Accounting Behavior. Contributions to Finance and Accounting. Springer, Singapore. https://doi.org/10.1007/978-981-33-4462-4_11

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  • DOI: https://doi.org/10.1007/978-981-33-4462-4_11

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