Family management and corporate charitable donations in Chinese family firms: An inverted u-shaped relationship

Abstract

This paper examines the influence of family management on corporate charitable donations. Drawing from the literature on socioemotional wealth, we propose that the level of family management and corporate charitable donations presents an inverted U-shaped relationship, and that this inverted U-shaped relationship is weakened by firm diversification levels and an unfair competition environment. An analysis of a comprehensive data set comprising 9266 firm-year observations, encompassing 1445 publicly listed Chinese family firms from 2010 to 2021, provides empirical support for our hypotheses. The results remain robust when accounting for endogeneity concerns. This study contributes to the growing body of research on environmental, social, and governance in the field of finance and accounting, and enhances our knowledge of sustainability practices in family firms.