Corporate philanthropic practices

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe study corporate philanthropy using an original database that includes firm-level data on dollar giving, giving priorities, governance, and managerial involvement in giving programs. Results provide some support for the theory that giving enhances 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 indicates that agency costs play a prominent role in explaining corporate giving. Firms with larger boards of directors are associated with significantly more cash giving and with the establishment of corporate foundations. Consistent with effective monitoring by creditors, firms with higher debt-to-value ratios give less cash to charities and are less likely to establish foundations. The empirical work considers the impact of industry regulation on giving and controls for state philanthropy laws and fiduciary responsibility laws. Corporate Philanthropic Practices AbstractWe study corporate philanthropy using an original database that includes firm-level data on dollar giving, giving priorities, governance, and managerial involvement in giving programs. Results provide some support for the theory that giving enhances 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 indicates that agency costs play a prominent role in explaining corporate giving. Firms with larger boards of directors are associated with significantly more cash giving and with the establishment of corporate foundations. Consistent with effective monitoring by creditors, firms with higher debt-to-value ratios give less cash to charities and are less likely to establish foundations. The empirical work considers the impact of industry regulation on giving and controls for state philanthropy laws and fiduciary responsibility laws.

Is doing good good for you? how corporate charitable contributions enhance revenue growth

“…Critics of corporate contributions argue that managers contribute to charity to further their own objectives and community status (Balotti and Hanks, 1999), to the detriment of shareholders. Useem and Kutner (1984), Galaskiewicz (1997), Boatsman and Gupta (1996), and Brown, Helland, and Smith (2006) present evidence consistent with the CEO and board members wielding substantial personal interest over the firms' giving decisions. Finally, Galaskiewicz (1985) reports that the most common rationale provided by managers is that their firms have a moral obligation to the communities in which they operate.…”

Do Political Connections Buffer Firms from or Bind Firms to the Government? A Study of Corporate Charitable Donations of Chinese Firms

“…We included firm size, which was measured as the logarithm of revenue (Grant et al 1988), since politics are more important to larger and more visible firms (Agrawal and Knoeber 2001). Prior research suggests that ownership concentration allows owners to monitor effectively and thus to discourage management from making donations (Brown et al 2006). We controlled for ownership concentration by the percentage of shares owned by the five largest shareholders.…”

“…Thus, firms relying more on the government and firms in regulated industries have been shown to be more active in political activities and are more likely to combine various political activities (Agrawal andKnoeber 2001, Hillman 2005, Peng and Luo 2000, Schuler et al 2002). Brown et al (2006) find that firms in more regulated industries are more likely to make charitable contributions to garner government goodwill. Active CSR is also used to gain legitimacy in some industries such as the Tobacco industry (Palazzo and Richter 2005).…”

The Value Relevance of Corporate Social Responsibility: Focusing on Donation Expenditure

“…They have used donation cost as a proxy variable of CSR and investigated the empirical relationship with firm value (Vance, 1975;Alexander & Bucholz, 1978;Anderson & Frankle, 1980;Cochran & Wood, 1984;Aupperle, Carroll, & Halfield, 1985;Ullmann, 1985;McGuire, Sundgren, & Schneeweis, 1988;Waddock & Graves, 1997;Fombrun et al, 2000;Brown, Hellan, & Smith, 2006;Fishman, Heal, & Nair, 2006;Lev, Christine, & Suresh, 2006;Parket & Eilbirt, 2006;Bird, Hall, Momentè, & Reggiani, 2007). In those previous studies, firm value is usually defined as market value of equity, calculated by summing all of the company's outstanding shares.…”

“…Fishman et al (2006) and Brown et al (2006) also document that companies in fierce competition spend much on donation expenses, and this has a positive influence on firm value. Although donations are not made for business purposes, these papers assume that donation cost promotes sales, which is finally associated with an increase in firm value.…”