Philanthropic Donations and Corporate Financial Performance : A Multiple Mediation Analysis

Using a sample of Chinese listed companies from 2012 to 2018, this paper examines the relationship between philanthropic donations and corporate financial performance. We adopt financial constraints and competitive advantages as two mediators and employ both the “causal steps” approach and the bootstrap method to test their indirect effects on the relationship between philanthropic donations and corporate financial performance. We find that the positive impact of philanthropic donations on corporate financial performance are partially mediated by reducing the degree of financial constraints and improving a firm’s competitive advantages. Our results are robust after controlling for reverse causality and using alternative measures of mediators