2008
DOI: 10.1287/orsc.1070.0271
|View full text |Cite
|
Sign up to set email alerts
|

Too Little or Too Much? Untangling the Relationship Between Corporate Philanthropy and Firm Financial Performance

Abstract: W hat is the relationship between corporate philanthropy and corporate financial performance? Some scholars argue that corporate philanthropy facilitates stakeholder cooperation and helps secure access to critical resources controlled by those stakeholders, suggesting that corporate philanthropy should be positively associated with corporate financial performance. In contrast, other scholars take a negative stance, suggesting that corporate philanthropy diverts valuable corporate resources and tends to inhibit… Show more

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...
2
1
1
1

Citation Types

21
549
3
1

Year Published

2009
2009
2023
2023

Publication Types

Select...
8
1

Relationship

0
9

Authors

Journals

citations
Cited by 508 publications
(623 citation statements)
references
References 90 publications
21
549
3
1
Order By: Relevance
“…Yet Tobit models are only appropriate in situations where the latent variable can, in principle, take values below zero, which is not the case with corporate philanthropy. In addition, the Tobit model approach implicitly assumes that the decision to donate is a linear function of the same variables that predict donation amounts, in spite of recent research showing that the two decisions are better modeled independently (Wang et al 2008;Wang and Qian 2011). 1 For our research setting, we take the response of the Fortune Global 500 to the 2004 South Asian tsunami.…”
Section: Methodsmentioning
confidence: 99%
“…Yet Tobit models are only appropriate in situations where the latent variable can, in principle, take values below zero, which is not the case with corporate philanthropy. In addition, the Tobit model approach implicitly assumes that the decision to donate is a linear function of the same variables that predict donation amounts, in spite of recent research showing that the two decisions are better modeled independently (Wang et al 2008;Wang and Qian 2011). 1 For our research setting, we take the response of the Fortune Global 500 to the 2004 South Asian tsunami.…”
Section: Methodsmentioning
confidence: 99%
“…This study is important because it highlights the nonlinear relationship between philanthropy and financial performance. However, Wang et al (2008) do not attempt to address the causality issue; their 186 B. Lev, C. Petrovits, and S. Radhakrishnan results are also consistent with high financial performance driving more philanthropy as a managerial perquisite.…”
Section: Corporate Philanthropy and Revenuesmentioning
confidence: 99%
“…A recent study by Wang, Choi, and Li (2008) does directly examine the effect of giving on financial performance. Wang et al reports a positive regression coefficient on corporate giving and a negative coefficient on the quadratic term for corporate giving, which they interpret as decreasing marginal returns at higher levels of giving.…”
Section: Corporate Philanthropy and Revenuesmentioning
confidence: 99%
“…The negative relationship is explained by the thesis that high investment in CSR would result in additional costs that would reduce profits and shareholder wealth (Hull and Rothenberg, 2008). Empirical evidence demonstrates that CSR investment can be destructive to financial performance when it passes a certain level (Wang et al, 2008). The neutral relationship is explained by the complexity of both the firm and the society, which makes it difficult to establish a simple and direct link between CSR and firm performance (Margolis and Walsh, 2003;Ullmann, 1985;Waddock and Graves, 1997).…”
Section: Impact Of Csr On Financial Performancementioning
confidence: 99%