Affordable Access

deepdyve-link
Publisher Website

Adversity Tries Friends: A Multilevel Analysis of Corporate Philanthropic Response to the Local Spread of COVID-19 in China

Authors
  • Chen, Hanwen1
  • Liu, Siyi2
  • Liu, Xin2
  • Yang, Daoguang2
  • 1 Nanjing Audit University,
  • 2 University of International Business and Economics,
Type
Published Article
Journal
Journal of Business Ethics
Publisher
Springer-Verlag
Publication Date
Feb 17, 2021
Pages
1–28
Identifiers
DOI: 10.1007/s10551-021-04745-z
PMID: 33612897
PMCID: PMC7887540
Source
PubMed Central
Keywords
License
Unknown

Abstract

We examine corporate philanthropic decisions in response to the local spread of COVID-19. From a strategic perspective, firms may proactively undertake philanthropic efforts to limit the spread of the pandemic and avoid a degraded business environment. From the perspective of non-trivial costs, increased economic uncertainty can raise concerns about business survival and lead to conservative philanthropic strategies. Following the proverb “prosperity makes friends, adversity tries them,” at the provincial level, our results support the second perspective. Specifically, when the spread of the pandemic worsens in a province, local firms are less likely to make COVID-19-related donations in terms of likelihood and amount. Investors also react negatively, not only to the local spread of COVID-19 but also to COVID-19-related philanthropic donations. At the organizational level, our evidence indicates that there is at least some level of cost–benefit analysis underlying corporate philanthropic decisions. Specifically, corporate philanthropic donations, especially those made to the local business environment, are significantly affected by organizational-level factors, such as pre-existing resource availability and motives to acquire political and reputational resources. Overall, our multilevel study presents a comprehensive picture of corporate philanthropic decisions amid the COVID-19 crisis.

Report this publication

Statistics

Seen <100 times