Corporate Philanthropy as Expropriation
Authors
Alan Muller
University of Amsterdam Business School
Plantage Muidergracht 12
1018 TV Amsterdam
The Netherlands
amuller@uva.nl
Weiqiang Tan
Hong Kong Baptist University School of Business
34 Renfrew Road
Kowloon Tong, Hong Kong
Stephen Y-L. Cheung
Hong Kong Baptist University School of Business
34 Renfrew Road
Kowloon Tong, Hong Kong
Mike W. Peng
Jindal School of Management
University of Texas at Dallas
800 West Campbell Road, SM43
Richardson, TX 75080
Description
Linking the literature on corporate philanthropy to the literature on corporate governance in transition economies, we conceptualize corporate philanthropy by state-controlled firms as a form of principal-principal conflict resulting in expropriation of minority shareholders. We develop a contingency-based framework centered on the conflict of interest between the state and the chairman of the board on the one hand, and minority shareholders on the other. Analysis of antecedents and consequences of corporate philanthropy by listed firms in China reveals that state-controlled firms’ corporate philanthropy is associated with both expropriation of value from minority shareholders and appropriation of political benefits by the chairmen who authorize philanthropy.
Corporate Philanthropy as Expropriation
University of Washington Tacoma, Philip Hall
Linking the literature on corporate philanthropy to the literature on corporate governance in transition economies, we conceptualize corporate philanthropy by state-controlled firms as a form of principal-principal conflict resulting in expropriation of minority shareholders. We develop a contingency-based framework centered on the conflict of interest between the state and the chairman of the board on the one hand, and minority shareholders on the other. Analysis of antecedents and consequences of corporate philanthropy by listed firms in China reveals that state-controlled firms’ corporate philanthropy is associated with both expropriation of value from minority shareholders and appropriation of political benefits by the chairmen who authorize philanthropy.
https://digitalcommons.tacoma.uw.edu/clsr_academic/2013/pres/1