Customer Heterogeneity and Corporate Philanthropy: Evidence from A-Share Listed Companies in China

Corporate philanthropy is of great significance to firm strategy. The signaling corporate philanthropy holds that customers play an important role in the relationship between corporate philanthropy and financial performance. However, customer heterogeneity has been neglected in the analytic process perspective. With a dataset of 2,246 listed A-share companies in China from 2009 to 2013, this study examines the impact of information asymmetry between customers and firms on corporate philanthropy, and further identifies the effects of product characteristics, ownership structure and institutional environment on that relationship. The empirical results show that information asymmetry between customers and firms positively influence firms' willingness to donate, amount of donation, and donation intensity. And ownership structure (product distinctiveness) weakens (strengthens) that relationship. The conclusions of this study provide reference for better understanding the relationship between corporate philanthropy and financial performance as well as motivations and behavior of corporate donation.