Redemption of original sin? Charitable donations of privatized enterprises in China

ABSTRACT

We explore unethical behaviours involving original sin during the privatized process and their influence on corporate donations in China. We find that enterprises are more actively and deeply engaging in donations when they are guilty of being involved in certain types of misconduct during the privatization process, including downward earnings management, insider trading, and tunnelling, and this phenomenon has particularly significance in regions with lower levels of non-state economic development.

KEYWORDS:

• Corporate philanthropy
• original sin
• privatization
• corporate misconduct

JEL CLASSIFICATION:

• D21
• D23
• G32

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the National Natural Science Foundation of China (NSFC: 72002043); Guangdong Basic and Applied Basic Research Foundation (2019A1515011881); Guangzhou Philosophy and Social Science Planning 2020 Annual Project (2020GZGJ118); and Innovative Team Project of Guangdong ”Finance and Accounting Innovation Research Team under Guangdong, Hong Kong and Macau Greater Bay Area Capital Market”.