Looking good by doing good: The antecedents and consequences of stakeholder attention to corporate disaster relief

Abstract

Stakeholder theory suggests a relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) because certain stakeholders reward certain types of CSR. This argument assumes that stakeholders attend to firms' CSR activities-an assumptionthat has yet to be examined. We fill this gap by extending stakeholder theory to the context of stakeholder attention to firm CSR and exploring the antecedents and consequences of stakeholder attention to corporate disaster relief CSR. We test the resulting hypotheses on a sample of public companies that engaged in natural disaster relief efforts, finding that stakeholder attention partially mediated the relationship between disaster relief and CFP and that stakeholder attention to corporate disaster relief was driven by the legitimacy, urgency, and enactment of disaster relief CSR initiatives.

Innovating for sustainability: a framework for sustainable innovations and a model of sustainable innovations orientation

“…Berrone and Gomez-Mejia (2009) note that the link between environmental actions and financial performance may not be straightforward, and that good environmental performance may take time to come to fruition, increasing uncertainty about outcomes. Madsen and Rodgers (2015) note that while firms may accrue benefits such as reputational insurance, leniency from regulators, and decreased risk of public activism from their CSR activities, CSR costs may exceed benefits over shorter time horizons. However, they note, the expected value of corporate financial performance over the long term may be positive.…”

Sincerity in Corporate Philanthropy, Stakeholder Perceptions and Firm Value

“…This is particularly important because the benefits of corporate philanthropy in securing access to critical resources would, in essence, focus on long-term benefits that their charitable acts can derive. Moreover, although stakeholders' perceptions of a firm's corporate philanthropy are not directly observable, considerable evidence (e.g., Godfrey et al 2009, Muller and Kräussl 2011, Ramchander et al 2012, Flammer 2013, Madsen and Rodgers 2015 suggests that financial markets and investors incorporate the impact of socially responsible activities on a broad set of stakeholders' attitudes and behavior and, thus, on the future cash flows and value of the firm (for a general but more detailed discussion on this issue, please also see, for example, Mackey et al 2007). Hence, our dependent variable allows us to investigate the impact of different types of philanthropy and whether stakeholders perceive them as being more or less sincere and substantive on the valuation of firms.…”

The relative value of firm and nonprofit experience: Tackling large‐scale social issues across institutional contexts

“…Our study offers theoretical contributions to research on nonmarket strategy and cross‐sector partnerships. Within the former, the literature on corporate disaster giving is still nascent and has focused on the drivers of such engagement (Ballesteros, ; Luo et al, ; Madsen & Rodgers, ; Muller & Whiteman, ; Tilcsik & Marquis, ; Zhang & Luo, ), its strategic value for the firm (Crampton & Patten, ; Madsen & Rodgers, ; Muller & Kräussl, ; Patten, ), and to a lesser extent its effects on social welfare (Ballesteros et al, ). Our paper shifts the conversation beyond showing why firms engage and should engage in these types of initiatives to explaining when and how they do so.…”

“…The fact that firms may strive to donate substantially to the public good may be aligned with the pursuit of financial profits (Kaul & Luo, ). Multiple studies point to an association between corporate disaster aid and performance benefits (Madsen & Rodgers, ), which often increase with donation amount (Crampton & Patten, ; Muller & Kräussl, ; Patten, ). The underlying mechanisms driving these benefits may include reputational gains (Madsen & Rodgers, ; Muller & Kräussl, ), improved labor productivity (Flammer & Luo, ), and restoring consumer purchasing power and the firm's supply chain (Ballesteros et al, ).…”

“…We built our counterfactual groups using the firm‐, country‐, and disaster‐specific characteristics that the extant literature has identified as predictors of the magnitude of company giving. We included six groups of firm‐specific variables following studies on corporate disaster giving and broader nonmarket strategy (Ballesteros et al, ; Dorobantu, Kaul, & Zelner, ; Kaul & Luo, ; Luo, Zhang, & Marquis, ; Madsen & Rodgers, ; Muller & Kräussl, ; Patten, ; Tilcsik & Marquis, ; Zhang & Luo, ). Additionally, we included a variable measuring the experience of the firm working with NPOs, as this may increase willingness and ability to use an NPO to channel aid (Gatignon & Capron, ; Gulati & Gargiulo, ; Selsky & Parker, ).…”