Crowding-in and crowding-out effects of corporate philanthropy on R&D investment

Using a sample of Chinese-listed firms over the period 2007-2018, this study investigates the effect of corporate philanthropy (CP) on research and development (R&D) investment and the mechanisms involved. The results show that an inverted U-shaped relationship exists between CP and R&D investment, suggesting that CP first has a crowding-in effect and then a crowding-out effect on R&D investment. Further mechanism analysis shows that the crowding-in effect of CP on R&D investment is partly realized through the path of obtaining government subsidies and mitigating financing constraints, and the crowding-out effect is partly the result of agency conflicts and resource allocation.