CEO Characteristics and the Corporate Philanthropy in Korean Firms: A Quantile Regression Approach

This paper analyzes three CEO characteristics as potential determinants of corporate philanthropy for a sample of Korean firms by using the simultaneous quantile regression method to supplement the limitations of conventional regression approaches. The study empirically investigates the relationship between selected CEO characteristics and corporate philanthropy using the stakeholder theory. Our empirical evidence indicates that every quantile of CEOs who act as firm owners have a negative relationship towards giving, although statistically insignificant. When a CEO owner allocates more to giving, the expenditure is more negatively associated with corporate philanthropy. Second, a CEO’s dual role as owner is generally negatively associated with corporate philanthropy; however, this dynamics requires further investigation because the effect changes from negative to positive. Third, the longer a CEO’s tenure, the greater the negative correlation with giving; this negative relationship does not change depending on the level of corporate philanthropy. The Fama-Macbeth model and the OLS model also generate results similar to those of the above quantile regression model. In summary, using the quantile regression approach, together with other robust tests, we confirm negative relationships between Korean CEOs and corporate philanthropy. Moreover, the negative effects show different patterns depending on the level of corporate philanthropy.