Corporate philanthropy and investment efficiency: Empirical evidence from China

Jun Chen, Wang Dong, Jamie Yixing Tong and Feida Frank Zhang

Pacific-Basin Finance Journal, 2018, vol. 51, issue C, 392-409

Abstract: Using panel data from China, we find a positive relationship between philanthropic engagement and investment efficiency. In addition, we find that the positive association between philanthropy and investment efficiency is stronger when the company is located in a region with better institutional environments. Our results suggest that companies engaging in philanthropic donations have incentives to enhance their reputation and/or promote their relationships with stakeholders, leading to lower agency problems and higher investment efficiency.

Keywords: Corporate philanthropy; Investment efficiency; China study; Emerging economy; Institutional environment (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:51:y:2018:i:c:p:392-409

DOI: 10.1016/j.pacfin.2018.08.008

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