A Study of Corporate Philanthropic Traits among Major Malaysian Corporations

Abstract

PurposeThe purpose of this study is to comprehend the whole phenomenon of corporate philanthropy in Malaysia by studying the traits of companies that make significant contributions to society. Specifically, it looks at firms' ownership structures and specific characteristics and their influence on the extent of corporate philanthropy.Design/methodology/approachThis study employs Agency theory as the basis for explaining philanthropic behaviour of Malaysian companies. A total of 100 public‐listed companies were selected from the top 200 companies based on market capitalization as listed on the Bursa Malaysia. The ownership structures and firm characteristics of the selected companies were tested against the extent of corporate philanthropy in order to see the relationship among the variables. In addition, multiple regression analysis was used to test the hypotheses.FindingsThe findings of this study reveal that ownership structure does have some influence on corporate philanthropic activities. This is consistent with the proposition of Agency theory. In addition, the size factor is also found to be a significant determinant of philanthropic tendency among Malaysian companies.Practical implicationsIn view of the increasing importance of corporate philanthropy in the overall context of corporate social responsibility and nation building, this study serves well in providing an insight into the determinants of corporate philanthropic tendencies in Malaysia. By doing this, it extends the horizon of the study done by Prathaban and Rahim on the levels of firm charitable contributions.Originality/valueThis paper offers an important explanation of the factors that influence corporate philanthropic tendency, particularly in the Malaysian context.