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Crowding‐in and crowding‐out effects of corporate philanthropy on R&D investment

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  • Shuxia Zhang
  • Liping Xu
  • Ning Liu

Abstract

Using a sample of Chinese‐listed firms over the period 2007–2018, this study investigates the effect of corporate philanthropy (CP) on research and development (R&D) investment and the mechanisms involved. The results show that an inverted U‐shaped relationship exists between CP and R&D investment, suggesting that CP first has a crowding‐in effect and then a crowding‐out effect on R&D investment. Further mechanism analysis shows that the crowding‐in effect of CP on R&D investment is partly realized through the path of obtaining government subsidies and mitigating financing constraints, and the crowding‐out effect is partly the result of agency conflicts and resource allocation.

Suggested Citation

  • Shuxia Zhang & Liping Xu & Ning Liu, 2022. "Crowding‐in and crowding‐out effects of corporate philanthropy on R&D investment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1835-1849, September.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:6:p:1835-1849
    DOI: 10.1002/mde.3491
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