Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-23T04:17:06.890Z Has data issue: false hasContentIssue false
  • English
  • Français

Business owners’ achieved social status and corporate philanthropy: Evidence from Chinese private small- and medium-sized enterprises

Published online by Cambridge University Press:  27 September 2016

Yongqiang Gao ,
Taïeb Hafsi  and
Xiaobin He
Yongqiang Gao*
Affiliation:
School of Management, Huazhong University of Science & Technology, Wuhan City, P.R. China
Taïeb Hafsi
Affiliation:
HEC, University of Montreal, Montreal, QC, Canada
Xiaobin He
Affiliation:
School of Management, Fudan University, Shanghai City, P.R. China
*
Corresponding author: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Using a nationwide survey of Chinese private small- and medium-sized enterprises, this study examines the effect of business owners’ achieved social status (AcSS) on corporate philanthropy (CP). AcSS is an institutional resource, sometimes an institutional constraint, which should lead to higher CP. In this study, it is measured by a composite index of business owners’ income, education, political ties, and individual donations. AcSS has a positive effect on CP. In different regressions, we find that individual variables, income, political ties, and individual donations are positively associated with CP, while the effect of education is not significant. Firm visibility moderates (weakens) the effect of AcSS, while owners’ equity ratio has no discernable moderation effect on CP. Overall, this study confirms that owners’ AcSS, an important resource for the firm, plays a significant role in corporate social behavior. It increases pressures and expectations from the public, leading to higher CP.

Keywords

achieved social statusbusiness ownercorporate philanthropyChinese private SMEsneo-institutional theory
Type
Research Article
Information
Journal of Management & Organization , Volume 23 , Issue 2 , March 2017 , pp. 277 - 296
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adams, M., & Hardwick, P. (1998). An analysis of corporate donations: United Kingdom evidence. Journal of Management Studies, 35(5), 641–654.CrossRefGoogle Scholar
Ai, C., & Norton, E. C. (2003). Interaction terms in logit and probit models. Economics Letters, 80(1), 123–129.Google Scholar
Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Newbury Park, CA: Sage.Google Scholar
Amato, L. H., & Amato, C. H. (2012). Retail philanthropy: Firm size, industry, and business cycle. Journal of Business Ethics, 107(4), 435–448.Google Scholar
Anderson, A. R., Li, J., Harrison, R. T., & Robson, P. J. A. (2003). The increasing role of small business in the Chinese economy. Journal of Small Business Management, 41(4), 310–316.Google Scholar
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.CrossRefGoogle Scholar
Bartkus, B., Morris, S., & Seifert, B. (2002). Governance and corporate philanthropy. Business & Society, 41(3), 319–344.Google Scholar
Belsley, D. A., Kuh, E., & Welsch, R. E. (1980). Regression diagnostics: Identifying influential data and sources of collinearity. New York: John Wiley & Sons.Google Scholar
Berger, J., Cohen, B. P., & Zelditch, M. Jr. (1972). Status characteristics and social interaction. American Sociological Review, 37(1), 241–255.Google Scholar
Berger, J., Fisek, M. H., Zorman, R. Z., & Zelditch, M. Jr. (1977). Status characteristics and social interaction: An expectation states approach. New York: Elsevier.Google Scholar
Berger, J., Wagner, D. G., & Zelditch, M. Jr. (1985). Introduction: Expectation states theory: Review and assessment. In J., Berger, & M., Zelditch (Eds.), Status, rewards, and influence (pp. 1–72). San Francisco, CA: Jossey-Bass.Google Scholar
Berrone, P., Cruz, C., Gomez-Mejia, L. R., & Larraza-Kintana, M. (2010). Socioemotional wealth and corporate responses to institutional pressures: Do family-controlled firms pollute less? Administrative Science Quarterly, 55, 82–113.Google Scholar
Bourdieu, P. (1984). Distinction: A social critique of the judgment of taste ((Translated by Richard Nice). Cambridge: Harvard University Press.Google Scholar
Brammer, S., & Millington, A. (2006). Firm size, organizational visibility and corporate philanthropy: An empirical analysis. Business Ethics: A European Review, 15(1), 6–18.CrossRefGoogle Scholar
Brammer, S. J., & Millington, A. I. (2004). Stakeholder pressure, organizational size and the allocation of departmental responsibility for the management of corporate charitable giving. Business & Society, 43(3), 268–295.Google Scholar
Buchholtz, A. K., Amason, A. C., & Rutherford, M. A. (1999). Beyond resources: The mediating effects of top management discretion and values on corporate philanthropy. Business & Society, 38(2), 167–187.CrossRefGoogle Scholar
Burt, R. S. (1983). Corporate profits and co-optation: Networks of market constraints and directorate ties in the American economy. New York: Academic Press.Google Scholar
Campbell, L., Gulas, C. S., & Gruca, T. S. (1999). Corporate giving behavior and decision-maker social consciousness. Journal of Business Ethics, 19(4), 375–383.Google Scholar
Chang, S. J., Witteloostuijn, A. V., & Eden, L. (2010). From the editors: Common method variance in international business research. Journal of International Business Studies, 41(2), 178–184.CrossRefGoogle Scholar
Chevalier, A., & Lanot, G. (2002). The relative effect of family characteristics and financial situation on educational achievement. Education Economics, 10(2), 165–181.Google Scholar
Chiu, S., & Sharfman, M. (2011). Legitimacy, visibility, and the antecedents of corporate social performance: An investigation of the instrumental perspective. Journal of Management, 37(6), 1558–1585.Google Scholar
Choi, J., & Wang, H. (2007). The promise of a managerial values approach to corporate philanthropy. Journal of Business Ethics, 75(4), 345–359.CrossRefGoogle Scholar
Chou, L. P., & Xiao, R. K. (2011). Cultural capital and status attainment: An empirical study based in Shanghai. Chinese Social Science, 6, 121–135. (In Chinese).Google Scholar
Cohen, E. (1994). Designing groupwork: Strategies for the heterogeneous classroom. New York: Teachers College Press.Google Scholar
Contoyannis, P., & Jones, A. M. (2004). Socio-economic status, health and lifestyle. Journal of Health Economics, 23(5), 965–995.CrossRefGoogle ScholarPubMed
Davis, K. (1960). Can business afford to ignore corporate social responsibilities? California Management Review, 2(3), 70–76.Google Scholar
Du, X., Jian, W., Du, Y., Feng, W., & Zeng, Q. (2014). Religion, the nature of ultimate owner, and corporate philanthropic giving: Evidence from China. Journal of Business Ethics, 123(2), 235–256.Google Scholar
Duncan, Q. D. (1961). A socioeconomic index for all occupations. In A. J. Reiss, O. D. Duncan, P. K. Hatt, & C. C. North (Eds.), Occupations and social status (pp. 109–138). New York: Free Press.Google Scholar
Edmundson, B. (1986). Who gives to charity? American Demographics , 8, 45–49.Google Scholar
European Commission (2003). Commission recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises. Official Journal, L 124, 36–41.Google Scholar
Evans, M. D. R., & Kelley, J. (1995). Class and class conflict in six western nations. American Sociological Review, 60(4), 157–178.Google Scholar
Faccio, M., Masulis, R. W., & McConnell, J. J. (2006). Political connections and corporate bailouts. Journal of Finance, 61(6), 2597–2635.Google Scholar
Fama, E. F., & Jensen, M. N. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325.Google Scholar
Finkelstein, S., Hambrick, D. C., & Cannella, A. A. Jr. (2009). Strategic leadership: Theory and research on executives, top management teams and boards. Oxford: Oxford University Press.Google Scholar
Foladare, I. S. (1969). A clarification of ‘ascribed status’ and ‘achieved status’. The Sociological Quarterly, 10(1), 53–61.Google Scholar
Fombrun, C. J. (1996). Reputation: Realizing value from the corporate image. Boston, MA: Harvard Business School Press.Google Scholar
Foschi, M. (1992). Gender and double standards for competence. In C. L. Ridgeway (Ed.), Gender, interaction, and inequality (pp. 181–207). New York, NY: Springer-Verlag.Google Scholar
Galaskiewicz, J. (1997). An urban grants economy revisited: Corporate charitable contributions in the Twin Cities, 1979–81, 1987–1989. Administrative Science Quarterly, 42(3), 445–471.Google Scholar
Gao, Y. (2011). Philanthropic disaster relief giving as a response to institutional pressure: Evidence from China. Journal Business Research, 64(4), 1377–1382.CrossRefGoogle ScholarPubMed
Gardberg, N. A., & Fombrun, C. J. (2006). Corporate citizenship: Creating intangible assets across institutional environments. Academy of Management Review, 31(2), 329–346.Google Scholar
Gerth, H., & Mills, C. W. (1946). From Max Weber. London: Oxford University Press.Google Scholar
Glorieux, I., & Laurijssen, I. (2011). The labour market integration of the children of immigrants in Flanders, Belgium. In M., Koch, L., Mcmillan, & B., Peper (Eds.), Diversity, standardization and social transformation (pp. 213–222). Farnham: Ashgate Publishing.Google Scholar
Godfrey, P. C. (2005). The relationship between corporate philanthropy and shareholder wealth: A risk management perspective. Academy of Management Review, 30(4), 777–798.CrossRefGoogle Scholar
Godoy, R., Reyes-García, V., Leonard, W. R., Huanca, T., McDade, T., Vadez, V., & Tanner, S. (2007). Signaling by consumption in a native Amazonian society. Evolution and Human Behavior, 28(2), 124–134.Google Scholar
Gomez-Mejia, L. R., Cruz, C., Berrone, P., & DeCastro, J. (2011). The bind that ties: Socioemotional wealth preservations in family firms. Academy of Management Annals, 5(1), 653–707.CrossRefGoogle Scholar
Goy, J., Rosenberg, M. W., & King, W. (2008). Health risk behaviors: Examining social inequalities in bladder and colorectal cancers. Annals of Epidemiology, 18(2), 156–162.CrossRefGoogle ScholarPubMed
Hafsi, T., & Turgut, G. (2013). Boardroom diversity and its effect on social performance: Conceptualization and empirical evidence. Journal of Business Ethics, 112(3), 463–479.Google Scholar
Halfpenny, P. (1999). Economic and sociological theories of individual charitable giving: Complementary or contradictory? Voluntas: International Journal of Voluntary and Nonprofit Organizations, 10(3), 197–215.Google Scholar
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.Google Scholar
Hambrick, D. C., & Quigley, T. J. (2014). Toward more accurate contextualization of the CEO effect on firm performance. Strategic Management Journal, 35(4), 473–491.Google Scholar
Hauser, R. M., & Warren, J. R. (1997). Socioeconomic indexes for occupations: A review, update, and critique. Sociological Methodology, 27(1), 177–298.Google Scholar
He, E., & Sommer, D. W. (2006). Separation of ownership and control: Implications for board composition (Working Paper). Athens: University of Georgia.Google Scholar
Hess, D., & Warren, D. E. (2008). The meaning and meaningfulness of corporate social initiatives. Business and Society Review, 113(2), 163–197.Google Scholar
Hollingshead, A. B. (1975). Four factor index of social status (Working Paper). Department of Sociology, New Haven, Yale University.Google Scholar
Huang, X. (2009). Strategic decision making in Chinese SMEs. Chinese Management Studies, 3(2), 87–101.Google Scholar
Hull, C. E., & Rothenberg, S. (2008). Firm performance: The interactions of corporate social performance with innovation and industry differentiation. Strategic Management Journal, 29(7), 781–789.Google Scholar
Idowu, S. O., & Papasolomou, I. (2007). Are the corporate social responsibility matters based on good intentions or false pretences? An empirical study of the motivations behind the issuing of CSR reports by UK companies. Corporate Governance, 7(2), 136–147.Google Scholar
Jensen, M. C. (1993). The modern industrial revolution, exit and the failure of internal control systems. Journal of Finance, 48(3), 831–880.Google Scholar
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.Google Scholar
Jones, A., & Posnett, J. (1991). Charitable donations by UK households: Evidence from the family expenditure survey. Applied Economics, 23(2), 343–351.Google Scholar
Kaiser, H. F. (1960). The application of electronic computers to factor analysis. Educational and Psychological Measurement, 20(1), 141–151.CrossRefGoogle Scholar
Kelly, F., & Stein, J. (2011). The real world: An introduction to sociology (3rd ed.), New York: W.W. Norton & Company.Google Scholar
Lenway, S. A., & Rehbein, K. (1991). Leaders, followers, and free riders: An empirical test of the variation in corporate political involvement. Academy of Management Journal, 34(4), 893–905.Google Scholar
Li, J. J., Poppo, L., & Zhou, K. Z. (2008). Do managerial ties in China always produce value? Competition, uncertainty, and domestic vs. foreign firms. Strategic Management Journal, 29(4), 383–400.Google Scholar
Liang, J., Chen, S., & Gai, T. (2010). Political participation, governance structure, and philanthropic giving in private firms (Minying qiye de zhengzhi canyu, zhili jiegou yu cishan juanzeng). Management World, 7, 109–118 (in Chinese).Google Scholar
Lin, N., & Bian, Y. J. (2002). The process of employment and status attainment in rural Chinese. In Y. J., Bian (Ed.), Market transition and social stratification (pp. 83–115). Beijing: Shanlian Press. (In Chinese).Google Scholar
Lucey, B. M., Plaksina, Y., & Dowling, M. (2013). CEO social status and acquisitiveness. Qualitative Research in Financial Markets, 5(2), 161–177.Google Scholar
Magee, J. C., & Galinsky, A. (2008). Social hierarchy: The self-reinforcing nature of power and status. Academy of Management Annals, 2(1), 351–398.Google Scholar
Magnuson, K. A., & Duncan, G. (2002). Parents in poverty. In M. H. Bornstein (Ed.), Handbook of parenting (pp. 95–121). Mahwah, NJ: Lawrence Erlbaum.Google Scholar
Marquis, C., Glynn, M. A., & Davis, G. F. (2007). Community isomorphism and corporate social action. Academy of Management Review, 32(3), 925–945.Google Scholar
Marquis, C., & Qian, C. (2014). Corporate social responsibility reporting in China: Symbol or substance? Organization Science, 25(1), 127–148.Google Scholar
McWilliams, A., & Siegel, D. (2000). Corporate social responsibility and financial performance: Correlation or misspecification? Strategic Management Journal, 21(5), 603–609.Google Scholar
Merton, R. K. (1968). The Matthew effect in science. Science, 159(3810), 56–63.Google Scholar
Nishii, L., Gotte, A., & Raver, J. (2007). Upper echelon theory revisited: The relationship between upper echelon diversity, the adoption of diversity practices, and organizational performance (Working Paper No. 07-04). School of Industrial and Labor Relations, Cornell University, New York.Google Scholar
Norton, E. C., Wang, H., & Ai, C. (2004). Computing interaction effects and standard errors in logit and probit models. The Stata Journal, 4(2), 103–116.Google Scholar
Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16(1), 145–179.Google Scholar
Oliver, C. (1997). Sustainable competitive advantage: Combining institutional and resource-based views. Strategic Management Journal, 18(9), 697–713.3.0.CO;2-C>CrossRefGoogle Scholar
Peteraf, M., & Barney, J. (2003). Unraveling the resource-based tangle. Managerial and Decision Economics, 24(4), 179–191.Google Scholar
Piff, P. K., Kraus, M. W., Côté, S., Cheng, B. H., & Keltner, D. (2010). Having less, giving more: The influence of social class on prosocial behavior. Journal of Personality and Social Psychology, 99(5), 771–784.Google Scholar
Podolny, J. M. (2001). Networks as the pipes and prisms of the market. American Journal of Sociology, 107(1), 33–60.CrossRefGoogle Scholar
Preston, L. E., & O’Bannon, D. P. (1997). The corporate social-financial relationship: Typology and analysis. Business & Society, 36(4), 419–429.Google Scholar
Ridgeway, C. L., & Correll, S. J. (2006). Consensus and the creation of status beliefs. Social Forces, 85(1), 431–453.Google Scholar
Scott, W. R. (2014). Institutions and organizations: Ideas, interests, and identities (4th ed.), Thousand Oaks, CA: Sage.Google Scholar
Sen, S. (2011). Corporate social responsibility in small and medium enterprises: Application of stakeholder theory and social capital theory. DBA thesis, Southern Cross University, Lismore, NSW.Google Scholar
Sethi, S. P. (2003). Globalization and the good corporation: A need for proactive co-existence. Journal of Business Ethics, 43(1/2), 21–31.Google Scholar
Shemesh, J. (2010). CEO social status and risk taking (Working Paper), Los Angeles: University of Southern California. Retrieved from http://ssrn.com/abstract=1682625.Google Scholar
Sheng, S., Zhou, K. Z., & Li, J. J. (2011). The effects of business and political ties on firm performance: Evidence from China. Journal of Marketing, 75(1), 1–15.Google Scholar
Siemsen, E., Roth, A., & Oliveira, P. (2010). Common method bias in regression models with linear, quadratic, and interaction effects. Organizational Research Methods, 13(3), 456–476.CrossRefGoogle Scholar
Stewart, D. (2005). Social status in an open-source community. American Sociological Review, 70(5), 823–842.Google Scholar
Thye, S. R. (2000). A status value theory of power in exchange relations. American Sociological Review, 65(3), 407–432.CrossRefGoogle Scholar
Tobin, J. (1958). Estimation of relationships for limited dependent variables. Econometrica, 26(1), 24–36.Google Scholar
U.S. International Trade Commission (2010). Small and medium-sized enterprises: Overview of participation in U.S. exports (investigation No. 332-508, publication No. 4125).Google Scholar
Useem, M. (1988). Market and institutional factors in corporate contributions. California Management Review, 30(2), 77–88.Google Scholar
Waddock, S. A., & Graves, S. B. (1997). The corporate social performance-financial performance link. Strategic Management Journal, 18(4), 303–319.Google Scholar
Wang, H., & Qian, C. (2011). Corporate philanthropy and financial performance of Chinese firms: The roles of social expectations and political access. Academy of Management Journal, 54(6), 1159–1181.Google Scholar
Xiao, B. (2009). Thousand years of finance and economics: History of Chinese wealth (Qiannian Caijing: Zhongguoren de Caifu Wangshi). Beijing: Chinese Chang’an Press. (In Chinese).Google Scholar
Yamaguchi, K., & Wang, Y. (2002). Class identification of married employed women and men in America. American Journal of Sociology, 108(2), 440–475.Google Scholar
Zhang, R., Rezaee, Z., & Zhu, J. (2009). Corporate philanthropic disaster response and ownership type: Evidence from Chinese firms’ response to the Sichuan earthquake. Journal of Business Ethics, 91(3), 51–63.Google Scholar
Zhang, R., Zhu, J., Yue, H., & Zhu, C. (2010). Corporate philanthropic giving, advertising intensity, and industry competition level. Journal of Business Ethics, 94(1), 39–52.Google Scholar
Zhang, Y. (2004). The attainment of Chinese social status: Class succession and the intergenerational mobility. Sociological Studies, 18(4), 76–90. (In Chinese).Google Scholar
Zhu, X. (2012). Understanding China’s growth: Past, present, and future. Journal of Economic Perspectives, 26(4), 103–124.Google Scholar