ORCID
Lihong Liang: 0000-0003-2526-7126
Wenjie Ma: 0000-0003-1328-1051
Nina Liu: 0009-0001-5658-8179
Document Type
Article
Date
7-16-2025
Keywords
philanthropy, donation disclosure, anticorruption
Language
English
Disciplines
Business
Description/Abstract
This study explores the effect of China’s anticorruption campaign as a natural experiment for testing the agency-cost view of philanthropy. We find that state-owned enterprises (SOEs), which are more influenced by this campaign, experienced larger declines in philanthropy than non-state-owned enterprises (non-SOEs), especially regarding the percentage of high-agency-cost donations. The effect is more pronounced for firms with higher agency costs, namely firms with higher perks and located in low-legal-protection regions. Further, using manually collected data on firms’ philanthropy disclosure, we find that the campaign improves transparency in corporate philanthropy disclosures. SOEs are more likely to disclose donation information and provide more detailed disclosures than non- SOEs post-campaign. Finally, we find that investors react more positively to SOEs’ philanthropic announcements after the campaign than to non-SOEs’ announcements. Overall, our findings support the agency-cost view of corporate philanthropy, and external monitoring can curb the agency costs associated with such behavior.
Recommended Citation
Lihong Liang, Nian Liu, Wenjie Ma; Agency Problem and Corporate Philanthropy—Evidence from China’s Anticorruption Campaign. Journal of International Accounting Research 2025; https://doi.org/10.2308/JIAR-2024-001
Source
submission
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
