Corporate philanthropic giving and sustainable development

Abstract

Purpose

This paper aims to use the social impact hypothesis and the shift of focus hypothesis to examine what drives controversial industries to make philanthropic donations: sustainable development, which can in turn lead to higher firm performance or a better corporate image.

Design/methodology/approach

This study employed a sample of Chinese firms from 2008–2015 and conducted regression analysis to explore the motivations behind corporate philanthropy.

Findings

Philanthropic giving is positively and significantly related to all indicators of firm performance; the interaction term of controversial industries and philanthropic giving is also positively and significantly related to firm performance. The empirical evidence supports the social impact hypothesis.

Practical implications

The empirical evidence shows that firms engage in philanthropic giving, mainly in pursuit of their own interests. Hence, managers should consider the inherent characteristics of the company and then combine social interests with their economic interests to design a philanthropic strategy of their own, which can in turn contribute to sustainable development.

Originality/value

This paper empirically confirms that the social impact hypothesis holds for the philanthropic activities of Chinese firms. This is a rare finding in related studies.

Citation

Yu, H.-C. (2020), "Corporate philanthropic giving and sustainable development", Journal of Management Development, Vol. 39 No. 7/8, pp. 837-849. https://doi.org/10.1108/JMD-11-2019-0479