TY - JOUR
T1 - Doing good deeds in times of need: A strategic perspective on corporate disaster donations
AU - Muller, A.
AU - Kraeussl, R.G.W.
PY - 2011
Y1 - 2011
N2 - Major corporations often respond charitably in times of disaster. However, disasters can also impose nontrivial costs on firms themselves, and under adverse conditions, firms typically donate less, not more. This paper takes a strategic perspective on corporate magnanimity in times of crisis by looking at the relationship between firm value, reputation, and donations by U.S. Fortune 500 firms in the case of Hurricane Katrina. In general, we find that Katrina's landfall was associated with significant negative abnormal stock returns. In particular, we find that a reputation for social irresponsibility was associated with both the greatest drop in stock prices and the greatest likelihood of making a subsequent charitable donation in response to the disaster. © 2011 John Wiley & Sons, Ltd.
AB - Major corporations often respond charitably in times of disaster. However, disasters can also impose nontrivial costs on firms themselves, and under adverse conditions, firms typically donate less, not more. This paper takes a strategic perspective on corporate magnanimity in times of crisis by looking at the relationship between firm value, reputation, and donations by U.S. Fortune 500 firms in the case of Hurricane Katrina. In general, we find that Katrina's landfall was associated with significant negative abnormal stock returns. In particular, we find that a reputation for social irresponsibility was associated with both the greatest drop in stock prices and the greatest likelihood of making a subsequent charitable donation in response to the disaster. © 2011 John Wiley & Sons, Ltd.
U2 - 10.1002/smj.917
DO - 10.1002/smj.917
M3 - Article
SN - 0143-2095
VL - 32
SP - 911
EP - 929
JO - Strategic Management Journal
JF - Strategic Management Journal
IS - 9
ER -
