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Who Is the Beneficiary of Slack on Corporate Financial Performance and Corporate Philanthropy? Evidence from South Korea

Seungwha (Andy) Chung (), Hyunsang Pyo () and Andres Guiral ()
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Seungwha (Andy) Chung: School of Business, Yonsei University, Seoul 03722, Korea
Hyunsang Pyo: Professional Training Institute, Korea National Defense University, Nonsan-si, Chungcheongnam-do 33021, Korea
Andres Guiral: School of Business, Yonsei University, Seoul 03722, Korea

Sustainability, 2019, vol. 11, issue 1, 1-12

Abstract: As stakeholder relations vary depending on firm characteristics, the associations among corporate financial performance (CFP), corporate giving, and corporate social performance (CSP) are complex. In this paper, we contribute to the literature by exploring CFP as a predictor of CSP by differentiating the stakeholder groups that firms interact with; that is, primary versus secondary stakeholder relations. Our study also extends the existing literature by examining who the beneficiaries of corporate philanthropy are, and the role played on the CFP/CSP association. By extracting a sample of 52 firms and 312 firm-year observations from the Korea Economic Justice Institute database, we find that while CFP has a positive effect only on primary stakeholder relations, corporate philanthropy has a positive impact on both primary and secondary stakeholder relations. Furthermore, we observe an overall influence of CFP on stakeholder relations when corporate philanthropy is high. Our findings suggest that differentiating multiple stakeholder groups together with the role played by corporate philanthropy provides a more valuable and meaningful analysis of the antecedents of CSP.

Keywords: corporate philanthropy; corporate social performance; stakeholder relations; financial performance (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2019
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