Different forms of corporate philanthropy, different effects: A multilevel analysis

• Author: Yucheng Zhang,Rongrong Zhang,Xinyu Fu,Ben Nanfeng Luo,Lu Xing
• Published date: 01 October 2020
• Date: 01 October 2020
• DOI: http://doi.org/10.1111/beer.12312

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  wileyonlinelibrary.com/journal/beer Business Ethics: A Eur Rev. 2020;29:748–762.© 2020 John Wiley & Sons Ltd

1 | INTRODUCTION

Corporate phi lanthropy refer s to “a type of organ izational socia l

engagement tha t involves the alloc ation of time, mo ney, or goods

aimed at address ing a social need ” (Muller, Pfarrer, & Lit tle, 2014,

p. 1). The current lite rature has widely art iculated its strategi c value,

such as an improved or ganizationa l reputation an d financial per-

formance (e.g., Ji a & Zhang, 2014; Wang & Qian, 2011; Will iams

& Barrett, 20 00). Recent ly, a burgeoning bod y of literature has

emerged about t he positive impa cts of corpor ate philanthro py on

employees, suc h as their genera l work attitud es (Block, Glav as,

Mannor, & Erskine, 2017), organizational commitment (Brammer,

Millington, & R ayton, 2007 ), and organizat ional trust (Le e, Song,

Lee, Lee, & Bern hard, 2013). Drawin g on signaling the ory, an im-

plication of the se studies is th at corporate phi lanthropy ser ves as

an important signal about how the organizations treat employees

(Jamali, Samara, Zollo, & Ciappei, 2019; McNamara, Carapinha,

Pitt-Catsou phes, Valcour, & Lobel, 2 017). Thus, in order fo r a firm

to engage its emp loyees and realize t he strategic va lue of its cor-

porate philant hropy, it is essential to explore how the fi rm's corpo-

rate philanthro py is perceived by these employees ( Aguilera, Rupp,

Williams, & Gan apathi, 2007; Lindgreen & Swae n, 2010).

However, these current studies suffered from several lim-

itations and cou ld not, therefo re, draw solid con clusions. Firs t,

the face validit y of existing me asures of corpor ate philanthro py

is questionab le. Previous st udies mainly me asure corporate

Received: 19 June 2018 

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  Revised: 1 July 202 0 

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  Accepted: 9 July 202 0

DOI: 10 .1111/bee r.12312

ORIGINAL ARTICLE

Different forms of corporate philanthropy, different effects:

A multilevel analysis

Ben Nanfeng Luo1 | Lu Xing1 | Rongrong Zhang2 | Xinyu Fu3 | Yucheng Zhang4

Abbreviat ion: CSR, corp orate social re sponsibilit y

1School of Lab or and Human Resour ces,

Renmin University of China, Beijing, China

2School of Busi ness, Universit y of Alberta,

Edmonton, AB, Canada

3Katz Grad uate School of Busine ss,

University of Pittsburgh, Pittsburgh, PA,

USA

4School of Econo mics and Manageme nt,

Hebei Univer sity of Technology, Tia njin,

China

Correspondence

Lu Xing, Scho ol of Labor and Huma n

Resources, Re nmin Universit y of China,

Beijing 100872, China.

Email: xinglu1993@163.com

Yucheng Zhang, S chool of Economics

and Management, Hebei University of

Technology, Tianjin 300401, China.

Email: yucheng.eason.zhang@gmail.com

Funding information

National Natu ral Science Found ation of

China, Gran t/Award Number: 71972065,

71602163 and 71672189; General P rogram

of Natural Sci ence Foundation of He bei

Province of Chin a, Grant/Award Numbe r:

G2019202307

Abstract

This study investig ates how different t ypes of corporate p hilanthropy impac t em-

ployees' life satisfa ction. Ground ed in signaling theor y, we explore and clarif y the

nuances among thre e types of corpor ate philanthropy value s: the absolute value of

corporate philanth ropy, the value of a firm's corporate p hilanthropy relative to it s

past level, and the val ue of corporate philant hropy relative to the fir m size. Results

of multilevel analyses o n a large scale sample with 218 firms and 2 ,261 employees at

two time points reve al that: the absolu te value of corporate phil anthropy positively

influences employee s' life satisfact ion; the value of a firm's corp orate philanthropy

relative to its past ph ilanthropy negativel y impacts emp loyees’ life satisfac tion; and

the value of corporate p hilanthropy relative to t he firm size positively af fects em-

ployees' life satisfa ction. The results indicate t hat the influences of corporate philan-

thropy on employees' life s atisfaction vary dep ending on the evaluation bench marks.

Firms may benefit by t aking their size and past philanthropy into co nsideration when

making corporate philanthropy investment decisions.