Does Doing Good Make a Firm Live Longer?: A Study on Slack Resources, Corporate Giving, and Corporate Survival

Corporate Survival (CS) is subject to a variety of factors. According to previous studies on strategic management, the major factors that affect CS are diversification, innovation, first-mover advantage, and corporate governance structure. This study uses the resource-based view and the institutional theory as the theoretical grounds for the justification of CS, and suggests that slack resources and corporate giving are valid factors that affect CS. The hypothesis that integrates above two theories suggests that the impacts of these two elements are jointly harmonized to complement each other. To verify the mediation effect of slack resources and corporate giving on CS, the model was estimated with a survival analysis of 479 companies listed in 2000, the year from which the Korean economy began to recover after the onset of the IMF financial crisis in 1997. The results confirmed the direct effect of slack resource and mediation of corporate giving on CS. The supplementary analysis delineated how CS can be changed in accordance with firm age and slack resources.