A self-interested gesture? Corporate charitable giving in response to government fiscal pressure
This study examines whether and how government fiscal pressure influences corporate charitable giving (CCG). The authors exploit sub-national tax revenue sharing changes as exogenous variations to government’s fiscal pressure at the city level and then construct a quasi difference-in-differences...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2023-06-01
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| Series: | China Accounting and Finance Review |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/CAFR-05-2022-0060/full/html |
| _version_ | 1827815412198277120 |
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| author | Shengfeng Lu Sixia Chen Yongtao Cang Ziyao San |
| author_facet | Shengfeng Lu Sixia Chen Yongtao Cang Ziyao San |
| author_sort | Shengfeng Lu |
| collection | DOAJ |
| description | This study examines whether and how government fiscal pressure influences corporate charitable giving (CCG).
The authors exploit sub-national tax revenue sharing changes as exogenous variations to government’s fiscal pressure at the city level and then construct a quasi difference-in-differences (DiD) model to conduct the analysis based on a sample that consists of 14,168 firm-year observations in China during the period of 2003 to 2012.
The authors found that firms increase charitable donations when local governments face higher fiscal pressure. Such effects are more pronounced for firms that have stronger demand for political connectedness in the sample period. Furthermore, this study’s findings suggest that the timing strategy of donating helps firms to lower the effective tax rate and to build stronger political connections. In addition, donating firms outperform non-donating firms in terms of bank loan access and market reputation.
The authors contribute to at least three lines of literature: first, extend the understanding of timing strategies of corporate charitable behaviors; second, contribute to the literature studying the “crowd out” effect between government-provided charitable funds and private donations; finally, contribute to the emerging literature exploring the financial interests associated with corporate donation strategy (Claessens et al., 2008; Cull et al., 2015). |
| first_indexed | 2024-03-12T00:00:45Z |
| format | Article |
| id | doaj.art-194df315f6f14a7d9f1bac4a1e36b20a |
| institution | Directory Open Access Journal |
| issn | 2307-3055 |
| language | English |
| last_indexed | 2024-03-12T00:00:45Z |
| publishDate | 2023-06-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | China Accounting and Finance Review |
| spelling | doaj.art-194df315f6f14a7d9f1bac4a1e36b20a2023-09-18T03:38:10ZengEmerald PublishingChina Accounting and Finance Review2307-30552023-06-0122522024810.1108/CAFR-05-2022-0060A self-interested gesture? Corporate charitable giving in response to government fiscal pressureShengfeng Lu0Sixia Chen1Yongtao Cang2Ziyao San3Wuhan UniversityZhongnan University of Economics and LawShanghai International Studies UniversityCapital University of Economics and BusinessThis study examines whether and how government fiscal pressure influences corporate charitable giving (CCG). The authors exploit sub-national tax revenue sharing changes as exogenous variations to government’s fiscal pressure at the city level and then construct a quasi difference-in-differences (DiD) model to conduct the analysis based on a sample that consists of 14,168 firm-year observations in China during the period of 2003 to 2012. The authors found that firms increase charitable donations when local governments face higher fiscal pressure. Such effects are more pronounced for firms that have stronger demand for political connectedness in the sample period. Furthermore, this study’s findings suggest that the timing strategy of donating helps firms to lower the effective tax rate and to build stronger political connections. In addition, donating firms outperform non-donating firms in terms of bank loan access and market reputation. The authors contribute to at least three lines of literature: first, extend the understanding of timing strategies of corporate charitable behaviors; second, contribute to the literature studying the “crowd out” effect between government-provided charitable funds and private donations; finally, contribute to the emerging literature exploring the financial interests associated with corporate donation strategy (Claessens et al., 2008; Cull et al., 2015).https://www.emerald.com/insight/content/doi/10.1108/CAFR-05-2022-0060/full/htmlcorporate charitable givinggovernment fiscal pressuretiming strategydifference-in-differences method |
| spellingShingle | Shengfeng Lu Sixia Chen Yongtao Cang Ziyao San A self-interested gesture? Corporate charitable giving in response to government fiscal pressure China Accounting and Finance Review corporate charitable giving government fiscal pressure timing strategy difference-in-differences method |
| title | A self-interested gesture? Corporate charitable giving in response to government fiscal pressure |
| title_full | A self-interested gesture? Corporate charitable giving in response to government fiscal pressure |
| title_fullStr | A self-interested gesture? Corporate charitable giving in response to government fiscal pressure |
| title_full_unstemmed | A self-interested gesture? Corporate charitable giving in response to government fiscal pressure |
| title_short | A self-interested gesture? Corporate charitable giving in response to government fiscal pressure |
| title_sort | self interested gesture corporate charitable giving in response to government fiscal pressure |
| topic | corporate charitable giving government fiscal pressure timing strategy difference-in-differences method |
| url | https://www.emerald.com/insight/content/doi/10.1108/CAFR-05-2022-0060/full/html |
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