Research on the Impact of Corporate Philanthropy on Corporate Financial Performance: based on the Integration Perspective of Strategy and Institution

Abstract

This paper, from a strategic and institutional integration perspective, explores how corporate philanthropy influences stakeholder decision-making and enhances corporate financial performance. By examining Chinese listed companies in Shanghai and Shenzhen, the study verifies a positive correlation between corporate philanthropy and financial performance. It also delves into the mechanisms that drive this relationship. Firstly, the paper demonstrates that sales revenue serves as a positive intermediary, showing that philanthropy as a strategic approach can help companies gain favor with real and potential consumers, reduce price elasticity, boost sales, and ultimately enhance financial performance. Secondly, media attention acts as another intermediary, with philanthropy helping companies gain social recognition, leading to increased positive media coverage, which further improves financial performance. Thirdly, government subsidies are found to play a key intermediary role, as companies that engage in philanthropy are more likely to receive government support and subsidies, which strengthens their financial standing. These findings underscore the multifaceted role philanthropy plays in bolstering corporate financial performance through strategic and institutional channels.