Being good by doing good: an analysis of audit fees, philanthropic initiatives and board gender diversity among Chinese listed firms
Abstract
Purpose
Despite the acknowledged significance of the relationship between audit fees and corporate philanthropic initiatives, the existing literature has not yet reached the desired level of providing explicit evidence on how this relationship can be moderated by board gender diversity. This paper aims to contribute to the ongoing debate by using a panel data set comprising 905 Chinese listed firms over a five-year period from 2015 to 2019.
Design/methodology/approach
To generate solid findings and overcome the potential endogeneity bias, various econometric estimators, namely, ordinary least squares, two-step generalized method of moments, robust two-stage least squares and subsample analysis, have been carefully used. More interestingly, the study’s results remain consistent across different estimation methods.
Findings
The results reveal a statistically significant positive link between audit fees and corporate charitable giving. More interestingly, this connection strengthens with a higher representation of women directors on the board, particularly when there are three or more female directors. Furthermore, the results suggest that nonstate-owned firms exhibit greater motivation to participate in charitable giving initiatives compared to state-owned counterparts.
Practical implications
Stakeholders from various groups should attentively recognize the importance of gender-diverse boards as a dynamic factor impacting the association between audit fees and corporate charitable giving.
Originality/value
To the best of the authors’ knowledge, the crushing majority of the preceding research has not delved deeply into the critical role of board gender diversity in the relationship between audit fees and corporate charitable donations. Hence, this study provides a profound understanding of how audit fees predict corporate philanthropic initiatives.
Keywords
Acknowledgements
Mohammad A.A. Zaid would like to express his sincere thanks to the Palestine Technical University-Kadoorie for supporting this research. Ayman Issa would like to extend his sincere gratitude to Dongbei University of Finance and Economics for supporting this research.
Citation
Zaid, M.A.A. and Issa, A. (2024), "Being good by doing good: an analysis of audit fees, philanthropic initiatives and board gender diversity among Chinese listed firms", Corporate Governance, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CG-01-2024-0018
Publisher
:Emerald Publishing Limited
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