Corporate Philanthropy After Fraud Punishment: An Institutional Perspective. (February 2020)

• Record Type: Journal Article
• Authors: Zhang, Lin; Xu, Yuehua; Chen, Honghui; Jing, Runtian
• Is Part Of: Management and organization review. Volume 16:Number 1(2020)
• Page Start: 33
• Page End: 68
• Publication Date: 2020-02
• Subjects: corporate philanthropy, -- emerging market, -- fraud punishment, -- institutional theory, -- legitimacy regaining strategy, -- political embeddedness; 企业慈善捐赠, -- 新兴市场, -- 财务舞弊惩罚, -- 制度理论, -- 合法性修复战略, -- 政治嵌入; корпоративная благотворительность, -- развивающийся рынок, -- наказание за мошенничество, -- институциональная теория, -- стратегия восстановления легитимности, -- политическая вовлеченность; filantropía corporativa, -- mercado emergente, -- castigo por fraude, -- teoría institucional, -- estrategia para ganar legitimidad, -- arraigo político; Management -- China -- Periodicals; Industrial management -- China -- Periodicals; International business enterprises -- Management -- Periodicals; Management -- Periodicals; Organizational sociology -- Periodicals; 658.00951
• DOI: 10.1017/mor.2019.41
• Languages: English
• ISSNs: 1740-8776

Abstract

ABSTRACT: This study examines corporate philanthropy in the context of corporate wrongdoing punishment in emerging markets. Building on institutional theory, we propose that in emerging markets, after being punished for fraudulent behavior by the government, which is collectively the largest institution, convicted firms tend to use corporate philanthropy as an institutional strategy to regain legitimacy. Using data of Chinese-listed firms that were punished for financial fraud in the ten years from 2004 to 2013, our findings show the subsequent growth of corporate philanthropy to be positively related to punishment severity. Furthermore, convicted firms' media visibility, dominant state ownership, and national political appointment strengthen the effect of punishment severity on corporate philanthropy increase. Our institutional perspective offers new insights into why firms engage in corporate philanthropy after fraud punishment.