Corporate Philanthropy in China: A Case of Doing Well by Doing Good?

Based on panel data of 1891 Chinese listed companies over the period 2008-2013, we find a positive correlation between the companies’ philanthropic giving and their ability to obtain bank loans in the subsequent year. This result suggests that corporate philanthropy can be usefully seen as an investment in cultivating good relationships with the government and that the investment return comes in the form of better access to government-controlled financial resources. Thus regardless whether or not the companies were motivated by altruistic considerations, their philanthropic giving was in fact (handsomely) rewarded. In this sense, corporate philanthropy in China seems to be a case of doing well by doing good.