Early Life Suffering Experience from Great Famine on Firm Charity, Agency Costs, and Corporate Governance

This study examines the impact of directors' famine experience on the corporate donation decision. We use a unique data set of 16,082 firm-year observations from Chinese listed firms to show that directors who experienced the Great Chinese Famine during 1959-1961 make more corporate donations,...

Full description

Saved in:
Bibliographic Details
Published in:The Chinese economy 2021-09, Vol.54 (5), p.330-346
Main Authors: Su, Zhong-qin, Yang, Biwen, Xu, Yuyang
Format: Article
Language:English
Subjects:
agency cost
Charities
Corporate donations
Corporate governance
Dependency theory
Donations
Earnings
Famine
Ownership
Path dependence
Philanthropy
Quality
Social responsibility
the Great Chinese Famine
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study examines the impact of directors' famine experience on the corporate donation decision. We use a unique data set of 16,082 firm-year observations from Chinese listed firms to show that directors who experienced the Great Chinese Famine during 1959-1961 make more corporate donations, a result that supports the path dependency theory related to the effect of prior experiences on subsequent behaviors. The relationship between a director's famine experiences and corporate charitable contributions is robust across different types of ownership and industry. We further show that these directors appear to consume fewer perquisites (i.e., lower agency costs), improve social responsibility, mitigate earnings management, and enhance internal control quality.
ISSN:1097-1475
1558-0954
DOI:10.1080/10971475.2021.1875157