Institutinal Environment, Political Connection And Corporate Philanthropy

This study purposes to examine the link between political connected company and the company's philanthropy in China's listed firms during 2004—2007. We find that political connection of company have positive effect on their philanthropy. Also, the effect on corporate charity doesn't only base on whether the firms have political connection, but also the style and level of the political connection the firms possess. The commissary political connection is positive to corporate philanthropy, and the higher the level is, the firm will give more; However, much of our evidence indicates that the officer political connection of company doesn't have the significant effect on corporate philanthropy. Moreover, under the typical economy transition background, the institutional environment in China moderates the impact of political connection on firm's philanthropy contribution: the better environment lowers the positive influence of political connection on company's charity activity. The empirical work considers the impact of institutional environment as well as political connection on corporate giving and the relationship between political connection and corporate social responsibility.