Analysis the Determinants of Corporate Philanthropy: A Case Study in the Jordanian Commercial Banks

Abstract

Problem statement: Corporate philanthropy measurement has been the concern of many corporations who have tried to develop determinants for it. Hence, this study explores the determinants of corporate donations listed on ASE-index for 12 commercial banks over the four year period 2005-2008. Simple and multiple regression techniques have been used for gauging the determinants of corporate philanthropy after collecting data from audited financial reports of banks. Approach: A sample study was derived from all banks that have been listed on the Amman Stock Exchange (ASE) during the 4 year period were sampled. Twelve banks qualified to be included in the study sample. Results: Provide some support for the theory that giving enhanced shareholder value, as firms in the same industry tend to adopt similar giving practices and firms that advertise more intensively also give more to charity. But much of our evidence indicated that agency costs play a prominent role in explaining corporate giving it was found that there is a statistically significant between earning before tax, firm size, advertising intensity, number of employees and salaries and wage expenses on Philanthropy measured by donations in every year and all the period of the study. Conclusion: The main recommendation presented in this study is that there is a need to motivate the corporate sector towards social involvement. To achieve that Ministry of finance or governments should recognize highest corporate philanthropists with awards and appreciations at national level. Build human resource development through technical support, training or internships in the management of philanthropic organizations.