Corporate Philanthropic Disaster Response and Post Performance : Evidence from China

This paper examines whether the decision and amount of firm charitable giving in response to catastrophic events are related to firm post-performance, and whether firm ownership type moderates this relationship. Using data on Chinese firms' philanthropic response to the 2008 Sichuan earthquake, we find that firm future sales growth and ROA change are positively associated with both the probability and the amount of corporate giving. The results also indicate that this positive philanthropic giving-post performance relationship is more pronounced in non-state-owned firms as philanthropic donation is more strategically driven for those firms. This study thus provides evidence suggesting that corporate philanthropic giving furthers firms' economic objectives, even in an emerging market setting