Does Corporate Charitable Giving Help Sustain Corporate Performance in China

We examined whether corporate charitable giving (CCG) in China benefits corporate performance (CP) in terms of sales growth ( SG ), return on asset ( ROA ), return on equity ( ROE ), and Tobin’s Q ( TQ ), and revealed several findings. First, testing shows variation in the impact of CCG on CP. Whereas the ratio of corporate charitable giving ( RCCG ) to total sales revenue does not significantly enhance SG , ROA , and ROE , it is positively related to TQ . Second, the positive relationship between RCCG and TQ originates from non-state-owned firms (NSOFs) rather than state-owned firms (SOFs). Third, Chinese firms may use CCG as traditional philanthropy to enhance long-term performance instead of strategically using it to generate short-term performance. Lastly, an inverted U-shaped relationship exists between RCCG and TQ , especially for NSOFs.