“Earning Pressure and Corporate Philanthropy: The Roles of Security Analyst and Foreign Exposure” by Professor Heli WANG
Professor Heli WANG
Professor of Strategic Management
Lee Kong Chian School of Business
Singapore Management University
This study examines how emerging-market firms respond to external market pressures and constraints by altering their corporate philanthropy (CP) expenditures, as well as how analyst coverage plays a disciplinary role in this process. Using theory and research on CP and institutional logics, we argue that the existence of two competing logics regarding the long-term value of CP influences firm responses as well as the disciplinary role of analyst coverage. We introduce foreign exposure – operationalized as foreign sales and foreign cross-listing – as a contingency variable that defines the relative dominance of the two divergent logics and therefore influence both firms and analysts in their CP decisions. We find empirical support for our hypotheses based on an analysis of manufacturing firms listed in China during the period of 2006 – 2012.