Business Groups and Tunneling: Evidence from Corporate Charitable Contributions by Korean Companies

Byungki Kim (smartlove@business.kaist.ac.kr), Jinhan Pae (jinhanpae@korea.ac.kr) and Choong-Yuel Yoo (cyoo@business.kaist.ac.kr)
Additional contact information
Byungki Kim: KAIST College of Business
Jinhan Pae: Korea University Business School
Choong-Yuel Yoo: KAIST College of Business

Journal of Business Ethics, 2019, vol. 154, issue 3, No 4, 643-666

Abstract: Abstract This paper investigates whether corporate philanthropic decisions are associated with a firm’s listing status and business group affiliation. Analyzing a large sample of public and private firms in Korea, we find that (1) public firms make more charitable contributions than private firms and (2) business group-affiliated firms make more charitable contributions than non-affiliated firms. The results suggest that public firms, owing to greater public scrutiny, and business groups, owing to higher political costs, are encouraged to make more corporate charitable contributions. Further, we find that (3) greater corporate giving by public firms than private firms is more pronounced for business group-affiliated firms, compared with non-affiliated firms. The result is consistent with business groups’ strategic coordination of their affiliates’ philanthropic decisions to tunnel business group resources out to controlling shareholders who hold a larger portion of private affiliates than public affiliates.

Keywords: Listing status; Business group; Corporate giving; Tunneling; Public scrutiny (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-016-3415-0 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:154:y:2019:i:3:d:10.1007_s10551-016-3415-0

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-016-3415-0

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).