Redemption of original sin? Charitable donations of privatized enterprises in China

We explore unethical behaviours involving original sin during the privatized process and their influence on corporate donations in China. We find that enterprises are more actively and deeply engaging in donations when they are guilty of being involved in certain types of misconduct during the privatization process, including downward earnings management, insider trading, and tunnelling, and this phenomenon has particularly significance in regions with lower levels of non-state economic development.

Automated summary

This study explores unethical behaviors, referred to as original sin, during the privatization process and their impact on corporate donations in China. The findings suggest that enterprises are more actively and deeply engaged in donations when they are guilty of specific types of misconduct, including downward earnings management, insider trading, and tunnelling. This phenomenon is particularly significant in regions with lower levels of non-state economic development.