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Asia Pacific Journal of Management
Published in: Asia Pacific Journal of Management 3/2017

03-02-2017

Military top executives and corporate philanthropy: Evidence from China

Authors: Jin-hui Luo, Yuangao Xiang, Ruichao Zhu

Published in: Asia Pacific Journal of Management | Issue 3/2017

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Abstract

This study, conducted in the context of China, investigates how the military experience of top executives influences their corporate philanthropy. Using a data set of 12,437 firm-year observations from China’s A-share firms listed on the Shanghai and Shenzhen stock exchanges between 2004 and 2013, we found that firms run by military top executives significantly donate less than those led by non-military top executives. Moreover, the reduction effect of military experience on corporate philanthropy is found to be more pronounced for firms located in regions with less developed markets, especially when firms’ chairmen have military background. This may be because military top executives are reluctant to illegitimately use corporate philanthropy due to a strong sense of ethics gained from their military service experience. These results are robust after adopting the propensity score matching (PSM) method to tackle the potential sample selection bias. Our findings provide a new interpretation of military experience and have important implications for understanding corporate philanthropy in China and in emerging markets in general.
previous article Venture capital reputation and portfolio firm performance in an emerging economy: The moderating effect of institutions

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Appendix
Available only for authorised users
Footnotes
1
On May 5th, 2008, soon after Vanke’s announcement of CNY 2 million donation, Wang Shi responded to public criticism on his blog (http://​blog.​sina.​com.​cn/​s/​blog_​47233d0f01009b8i​.​html).
 
2
The information (Notice about preferential policies supporting self-employment of retired solders in cities and towns and Regulation on compensation and preferential treatment for military servicemen) is published on http://​www.​gov.​cn/​gongbao/​content/​2004/​content_​63150.​htm; http://​www.​mca.​gov.​cn/​article/​zwgk/​fvfg/​yfaz/​200709/​20070900001746.​shtml.
 
3
Our overall sample consists of 12,437 firm-year observations and the percentage of firms managed by both military chairman and CEO is about .27%. To deal with the potential different effect of dual military experience, we try to redefine Military Executive and find similar results (not reported here), where Military Executive takes the value of 2 if a firm is managed by both military chairman and CEO, takes the value of 1 if a firm is run by only one military executive, and zero otherwise.
 
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Metadata
Title
Military top executives and corporate philanthropy: Evidence from China
Authors
Jin-hui Luo
Yuangao Xiang
Ruichao Zhu
Publication date
03-02-2017
Publisher
Springer US
Published in
Asia Pacific Journal of Management / Issue 3/2017
Print ISSN: 0217-4561
Electronic ISSN: 1572-9958
DOI
https://doi.org/10.1007/s10490-016-9499-3

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