Corporate Philanthropy and CEO Outside Directorships Under Authoritarian Capitalism

Scholars have long suggested that CEOs can benefit from corporate
philanthropy. However, little is known about this relationship in contexts
of authoritarian capitalism such as China, where the state not only uses its
control of economic entities to pursue social goals but also plays a key role
in CEOs’ careers. We theorize how corporate philanthropy among statecontrolled
firms increases the CEO’s likelihood of receiving career benefits
from the state in the form of outside directorships. Outside directorships
represent an important form of social capital in the Chinese context, and
corporate philanthropy is an important mechanism through which social
capital can be acquired. In addition, we theorize how two factors—the
degree of state ownership and the number of independent directors on
the CEO’s board—moderate this relationship. Analyzing a 12-year panel
of state-controlled, publicly-listed firms in China comprising 6,594 firm-year
observations, we find general support for our ideas. In so doing, we
contribute to scholarship on the business–society relationship and corporate
governance in the context of authoritarian capitalism.