Military top executives and corporate philanthropy: Evidence from China

This study, conducted in the context of China, investigates how the military experience of top executives influences their corporate philanthropy. Using a data set of 12,437 firm-year observations from China's A-share firms listed on the Shanghai and Shenzhen stock exchanges between 2004 and 2013, we found that firms run by military top executives significantly donate less than those led by non-military top executives. Moreover, the reduction effect of military experience on corporate philanthropy is found to be more pronounced for firms located in regions with less developed markets, especially when firms' chairmen have military background. This may be because military top executives are reluctant to illegitimately use corporate philanthropy due to a strong sense of ethics gained from their military service experience. These results are robust after adopting the propensity score matching (PSM) method to tackle the potential sample selection bias. Our findings provide a new interpretation of military experience and have important implications for understanding corporate philanthropy in China and in emerging markets in general.