How Does Corporate Party Committee Governance Affect Charitable Donations? Evidence from Heavy-Pollution Industries in China

Huiming Zhang, Lirong Li, Cheng Fan, Zixuan Hang and Haroon ur Rashid Khan
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Huiming Zhang: School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China
Lirong Li: School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China
Cheng Fan: School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China
Zixuan Hang: School of Applied Meteorology, Nanjing University of Information Science & Technology, Nanjing 210044, China
Haroon ur Rashid Khan: School of Management Science and Engineering, Nanjing University of Information Science & Technology, Nanjing 210044, China

Sustainability, 2021, vol. 13, issue 21, 1-14

Abstract: Charitable donations are an effective way for heavy-pollution industries to reduce their environmental reputation risk. In China, the communist party committees within corporations play a key role in decisions regarding charitable donations. However, relatively little is known about the relationship between the governance of corporate party committees and charitable donations. Using data from Chinese listed firms in heavy-pollution industries from 2013 to 2018, we found that corporate party committee governance enhanced the willingness of firms to donate and to increase the amount of their donations significantly. The effect on intention of charitable donations was pronounced for non-state-owned enterprises (NSOEs), whereas the effect on the amount of donations was pronounced for state-owned enterprises (SOEs). Party committee governance increased the amount of charitable donations in regions with a higher level of marketization, but it reduced the amount of charitable donations in firms/industries with a high degree of monopoly. Our findings provide insight for the decisive role of party committees in corporate charitable donations in heavy-pollution industries.

Keywords: corporate party committee governance; heavy-pollution industries; corporate donations; heterogeneity test; marketization level; monopoly strength (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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