IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v103y2025ics1059056025006513.html

Research on the relationship between corporate philanthropy and executive hidden corruption

Author

Listed:
  • Zhu, Caijie
  • Zhang, Luyao
  • Yu, Shuai
  • Hao, Lizhong

Abstract

This study examines the relationship between corporate philanthropy and executive hidden corruption using data from A-share listed companies in China from 2012 to 2022. The results show that higher levels of charitable donations are associated with a greater likelihood of hidden executive corruption. Effective internal control significantly weakens this relationship. This effect is more pronounced in non-state-owned enterprises, where both the positive association and the moderating role of effective internal control are stronger. Further analysis reveals that while media attention does not eliminate the positive link, it reduces its strength, along with the moderating impact of internal control. Board independence does not directly influence the philanthropy-corruption relationship; however, in state-owned enterprises with strong board independence, the mitigating role of internal control becomes more evident. these findings offer insights into how corporate governance mechanisms and external oversight can help curb executive misconduct associated with philanthropic activities.

Suggested Citation

  • Zhu, Caijie & Zhang, Luyao & Yu, Shuai & Hao, Lizhong, 2025. "Research on the relationship between corporate philanthropy and executive hidden corruption," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006513
    DOI: 10.1016/j.iref.2025.104488
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056025006513
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2025.104488?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ying, Limeng & Zhang, Jiaming & Zhu, Junyi & Gan, Yufei, 2024. "Impact of corporate philanthropy on firm performance: The moderating role of board structure," Research in International Business and Finance, Elsevier, vol. 72(PA).
    2. Fan, Joseph P.H. & Wong, T.J. & Zhang, Tianyu, 2007. "Politically connected CEOs, corporate governance, and Post-IPO performance of China's newly partially privatized firms," Journal of Financial Economics, Elsevier, vol. 84(2), pages 330-357, May.
    3. Li, Tinghui & Shu, Xin & Liao, Gaoke, 2024. "Does corporate greenwashing affect investors' decisions?," Finance Research Letters, Elsevier, vol. 67(PA).
    4. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
    5. Jensen, Michael C. & Meckling, William H., 2008. "Theory of the firm: managerial behavior, agency costs and ownership structure," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 48(2), April.
    6. Uyar, Ali & Gerged, Ali Meftah & Kuzey, Cemil & Hamrouni, Amal & Karaman, Abdullah S., 2024. "CSR awarding: A test of social reputation and impression management," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    7. Qi, Xiangqin & Fu, Jinwei & Li, Yuan & Xue, Lixing, 2023. "Executives with CPA firm career experience and corporate fraud," Finance Research Letters, Elsevier, vol. 58(PB).
    8. Lin Zhou & Xiao Liu, 2024. "The new government–business relationship and corporate philanthropy: An analysis based on political motivation," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(3), pages 807-840, September.
    9. Dongli Cao & Chunxian Nie, 2024. "Effect of government’s environmental attention on corporate philanthropy based on the institutional theory: Evidence from China’s heavily polluting companies," PLOS ONE, Public Library of Science, vol. 19(10), pages 1-31, October.
    10. Savvina Paganou & Ioannis Antoniadis & Georgia Zournatzidou & George Sklavos, 2024. "Investigating the Link among Corruption, Corporate Governance and Corporate Performance in Family Businesses: A Future Research Agenda," Administrative Sciences, MDPI, vol. 14(7), pages 1-14, July.
    11. Le Breton-Miller, Isabelle & Miller, Danny, 2024. "A multi-level model of family enterprise corruption," Journal of Family Business Strategy, Elsevier, vol. 15(3).
    12. Petrovits, Christine M., 2006. "Corporate-sponsored foundations and earnings management," Journal of Accounting and Economics, Elsevier, vol. 41(3), pages 335-362, September.
    13. Alexander Dyck & Natalya Volchkova & Luigi Zingales, 2008. "The Corporate Governance Role of the Media: Evidence from Russia," Journal of Finance, American Finance Association, vol. 63(3), pages 1093-1135, June.
    14. Zhang, Kaixia & Li, Weibing, 2024. "Environmental regulations and charitable donations made by polluting companies: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1248-1267.
    15. Hong, Qun & Shi, Huazhi, 2025. "The effect of government official's visit on corporate charitable donation: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 98(C).
    16. Qu, Shawn, 2024. "Litigation risk and corporate philanthropy: A managerial perspective analysis," Finance Research Letters, Elsevier, vol. 62(PA).
    17. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dong, Xiaonan, 2026. "The ESG-productivity paradox: how ESG performance expectation gaps impede total factor productivity," Journal of Business Research, Elsevier, vol. 202(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Wenzhuo & Qin, Luohan & Zhao, Yali & Zuo, Jingjing, 2024. "Social media coverage and perk consumption: Agency view or efficiency view?," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1058-1073.
    2. Zhao, Hongxin & Lu, Jiangyong, 2016. "Contingent value of political capital in bank loan acquisition: Evidence from founder-controlled private enterprises in China," Journal of Business Venturing, Elsevier, vol. 31(2), pages 153-174.
    3. D'Souza, Juliet & Nash, Robert, 2017. "Private benefits of public control: Evidence of political and economic benefits of state ownership," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 232-247.
    4. Liang, Quanxi & Wang, Zhimin & Guan, Xin & Qin, Wei, 2023. "Party direct control and corporate fraud: Evidence from China," The Quarterly Review of Economics and Finance, Elsevier, vol. 92(C), pages 274-290.
    5. Gao, Jianhao & Tu, Zhenzhou, 2025. "Foreign-funded firms and stock price informativeness: Evidence from Chinese capital markets," International Review of Economics & Finance, Elsevier, vol. 103(C).
    6. Rekha Handa & Balwinder Singh, 2017. "Performance of Indian IPOs: An Empirical Analysis," Global Business Review, International Management Institute, vol. 18(3), pages 734-749, June.
    7. Hong, Yun & Yao, Youfu, 2024. "Can comment letters impact excess perks? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    8. Fuxiu Jiang & Kenneth A Kim, 2020. "Corporate Governance in China: A Survey [The role of boards of directors in corporate governance: a conceptual framework and survey]," Review of Finance, European Finance Association, vol. 24(4), pages 733-772.
    9. Chenghao Huang & Jing Tang, 2023. "Will auditors charge more for corporate philanthropy? Evidence from China," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 32(1), pages 125-153, January.
    10. Fang, Mingyue & Nie, Huihua & Shen, Xinyi, 2023. "Can enterprise digitization improve ESG performance?," Economic Modelling, Elsevier, vol. 118(C).
    11. Gao, Xin & Xu, Weidong & Li, Donghui, 2025. "Media coverage and managerial investment learning from stock markets: International evidence," Research in International Business and Finance, Elsevier, vol. 76(C).
    12. Da Teng & Douglas B. Fuller & Chengchun Li, 2018. "Institutional change and corporate governance diversity in China’s SOEs," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(3), pages 273-293, May.
    13. Kim, Sang-Joon & Bae, John & Oh, Hannah, 2019. "Financing strategically: The moderation effect of marketing activities on the bifurcated relationship between debt level and firm valuation of small and medium enterprises," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 663-681.
    14. Ding, Mingfa, 2014. "Political Connections and Stock Liquidity: Political Network, Hierarchy and Intervention," Knut Wicksell Working Paper Series 2014/7, Lund University, Knut Wicksell Centre for Financial Studies.
    15. Kausar, Asad & Shroff, Nemit & White, Hal, 2016. "Real effects of the audit choice," Journal of Accounting and Economics, Elsevier, vol. 62(1), pages 157-181.
    16. Ben-Nasr, Hamdi & Ghouma, Hatem, 2018. "Employee welfare and stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 700-725.
    17. Francois Lantin & Pierre Roy, 2007. "L'impact de la notation financière sur les stratégies de croissance externe," Post-Print halshs-00692570, HAL.
    18. Mataigne, Virginie & Meoli, Michele & Vanacker, Tom & Vismara, Silvio, 2025. "False signaling by platform team members and post-campaign venture outcomes: Evidence from an equity crowdfunding platform," Journal of Business Venturing, Elsevier, vol. 40(1).
    19. Hanna Hottenrott & Bronwyn H. Hall & Dirk Czarnitzki, 2016. "Patents as quality signals? The implications for financing constraints on R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 197-217, April.
    20. Pan Xu & Jun He & Daojuan Wang & Sofia A. Johan & Siwei Lin, 2024. "Could the simultaneous persistence of greater cash holdings and interest‐bearing debts affect stock price crash risk?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3226-3262, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006513. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.