Corporate Philanthropic Giving, Advertising Intensity, and Industry Competition Level

Ran Zhang, Jigao Zhu, Heng Yue, Chunyan Zhu

Journal of Business Ethics · 2010 · Volume 94 · Issue 1

Abstract

This article examines whether the likelihood and amount of firm charitable giving in response to catastrophic events are related to firm advertising intensity, and whether industry competition level moderates this relationship. Using data on Chinese firms’ philanthropic response to the 2008 Sichuan earthquake, we find that firm advertising intensity is positively associated with both the probability and the amount of corporate giving. The results also indicate that this positive advertising intensity-philanthropic giving relationship is stronger in competitive industries, and firms in competitive industries are more likely to donate. This study thus provides evidence suggesting that even in the wake of catastrophic events, corporate philanthropic giving is strategic.

Keywords

advertising intensity, catastrophic events, corporate philanthropy, corporate social responsibility, industry competition level

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