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Company Charity More Present in Countries Lacking Human Rights

Namely in places such as China, DR Congo and Burma

Apr 2, 2009 08:22 GMT  ·  By
Companies have ulterior motives for donating in countries where civil liberties are at a very low level
   Companies have ulterior motives for donating in countries where civil liberties are at a very low level

According to new statistics from the UK, British companies that operate in countries that lack basic civil and human rights regulations are likely to donate 70 percent more money to charity than similar firms conducting their activities in nations where such regulations exist. The result of the new study again certifies the opinion of a growing body of researchers, who say that giving to charity plays an important role in all of these businesses' practices in the underdeveloped world.

“The positive impact on charitable giving is restricted to a presence in only those countries that are most lacking in political rights and civil liberties. Our findings suggest that companies are seeking to offset negative impressions in the eyes of the public that arise from doing business in such countries by making greater gifts to charity,” Henley Business School expert Dr. Stephen Pavelin, who has been part of the scientific and economics team that has carried out the new investigation, explains.

The finds, which have been published in a recent issue of the Journal of Management Studies, show that companies involved in countries lacking basic civil and human rights donate on average £1.977 million, as opposed to similar firms in other countries, which only give away a mean of £1.148 million each year. The paper has based its conclusions on the study of fiscal documents, submitted by the companies that were surveyed in 2002.

“It is clear that the characteristics of the countries within which companies operate play a more significant role in shaping corporate social performance than the degree of internationalization per se,” Dr. Pavelin adds. “This finding is perhaps indicative of relatively token responses to corporate exposure to political and civil rights issues, rather than significant attempts to address or atone for these issues through giving aimed at impacted communities.”

“It appears that the salient feature of a country in this connection is a lack of political rights and/or civil liberties, rather than a presence of high levels of corruption,” he concludes.