The dark-side effect of family management on corporate charitable donations in emerging markets: evidence from China

Purpose While family firms are often characterized as philanthropic stewards, the existing literature overlooks a “dark side” wherein the pursuit of restricted socioemotional wealth (SEW) can inhibit charitable giving. This study aims to examine the potential “dark side” effect of family management on corporate charitable donations and posits that a high degree of family management, indicative of a restricted SEW focus, reduces both the willingness and ability to allocate resources to nonfamily stakeholders. Design/methodology/approach The authors use a unique survey data collected from private firms across multiple provinces in China in 2015 to test the proposed hypotheses. A double-respondent questionnaire design was used to minimize potential common method bias, and a final sample of 278 family firms was used in the statistical analysis. Findings Family management is found to negatively impact a firm’s charitable donations. This effect is particularly pronounced in larger firms, where increased administrative complexity exacerbates managerial limitations, and in competitive environments marked by unfair competition, which heightens risk aversion. Social implications Charitable donations are recognized as a core purpose of corporations by the Business Roundtable. Our study challenges the prevailing assumption that family involvement inherently aligns with social responsibility, revealing instead the governance conditions under which the “dark side” of family involvement in philanthropy prevails. Family business owners should be mindful of the negative effects of family managers when pursuing charitable donations. Originality/value Few studies have explored the potential negative impact of family involvement on corporate charitable donations. By identifying the distinct role of management in activating the dark side of SEW and delineating key boundary conditions, our study contributes to a more nuanced understanding of corporate philanthropy in family businesses.