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Corporate giving and corporate financial performance: the S-curve relationship

Author

Listed:
  • Yongqiang Gao

    (Huazhong University of Science and Technology)

  • Haibin Yang

    (City University of Hong Kong)

  • Taïeb Hafsi

    (3000 Côte Ste-Catherine)

Abstract

The relationship between corporate giving and corporate financial performance has remained inconclusive after decades of research. This study advances our understanding by contending that stakeholders may react differently to a firm’s various levels of corporate philanthropic giving. The relationship between corporate giving and firm performance could be better captured using an S-curve shape in that either a low or high level of corporate giving will reduce, while a moderate level of corporate giving will increase, firm performance. We further examine the moderating effects of firm ownership and regional development. We contend that stakeholders may have higher expectations for the social performance of state-owned enterprises (SOEs) versus private-owned enterprises (POEs), resulting in a lower performance effect for SOEs with the same amount of corporate giving. Similarly, stakeholders in developed regions are also likely to have higher expectations for corporate giving, leading to a lower performance effect for the same level of corporate giving. Analyses of listed firms in China during the period from 2003 to 2013 support our thesis.

Suggested Citation

  • Yongqiang Gao & Haibin Yang & Taïeb Hafsi, 2019. "Corporate giving and corporate financial performance: the S-curve relationship," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 687-713, September.
    • Handle: RePEc:kap:asiapa:v:36:y:2019:i:3:d:10.1007_s10490-019-09668-y
    DOI: 10.1007/s10490-019-09668-y
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    3. Di Wang & Zhanchi Wu & Junjie You & Bangzhu Zhu & Rongwu Zhang, 2023. "Does hometown connection between chairmen and CEOs improve compensation–performance sensitivity in China?," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
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    5. Mingchuan Yu & Han Lin & Greg G. Wang & Yuan Liu & Xiaotao Zheng, 2022. "Is too much as bad as too little? The S-curve relationship between corporate philanthropy and employee performance," Asia Pacific Journal of Management, Springer, vol. 39(4), pages 1511-1534, December.
    6. Xinming Deng & Xianyi Long & Douglas A. Schuler & Huan Luo & Xiaofei Zhao, 2020. "External corporate social responsibility and labor productivity: A S‐curve relationship and the moderating role of internal CSR and government subsidy," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 393-408, January.
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