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Does Giving Lead to Getting? Evidence from Chinese Private Enterprises

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Abstract

Enterprise philanthropy is practiced in a very unique and rudimentary form in China. Based on a unique random survey data on 3837 Chinese private enterprises conducted in 31 provinces of China in 2006, I find the significant positive relationship between enterprise philanthropy donation and enterprise profitability, and the result supports the political and institutional power view of enterprise philanthropy in the latest development of China. Simply put, Chinese private enterprises carried out philanthropy activities to better protect property rights and nurture political connections, which in turn, leads to better enterprise profitability. The␣result is even stronger in institutions weaker provinces.

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Abbreviations

ROA:

Return on assets

ROE:

Return on equity

R&D:

Research and Development

SOE:

State-owned enterprise

RMB:

Chinese currency abbreviation (Renminbi)

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Authors and Affiliations

  1. Beijing Technology and Business University, Beijing, China

    Jun Su

  2. Chinese University of Hong Kong, Shatin, NT, Hong Kong

    Jia He

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  1. Jun Su
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  2. Jia He
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Correspondence to Jun Su.

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Su, J., He, J. Does Giving Lead to Getting? Evidence from Chinese Private Enterprises. J Bus Ethics 93, 73–90 (2010). https://doi.org/10.1007/s10551-009-0183-0

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  • DOI: https://doi.org/10.1007/s10551-009-0183-0

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