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Research Article
Doing good deeds in times of need: a strategic perspective on corporate disaster donations
Article first published online: 18 FEB 2011
DOI: 10.1002/smj.917
Copyright © 2011 John Wiley & Sons, Ltd.
Additional Information
How to Cite
Muller, A. and Kräussl, R. (2011), Doing good deeds in times of need: a strategic perspective on corporate disaster donations. Strat. Mgmt. J., 32: 911–929. doi: 10.1002/smj.917
Publication History
- Issue published online: 7 JUL 2011
- Article first published online: 18 FEB 2011
- Accepted manuscript online: 13 JAN 2011 10:08AM EST
- Manuscript Revised: 10 JAN 2011
- Manuscript Received: 24 JAN 2008
- Abstract
- Article
- References
- Cited By
Keywords:
- corporate philanthropy;
- firm value;
- disasters;
- Hurricane Katrina;
- social irresponsibility
Abstract
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. Copyright © 2011 John Wiley & Sons, Ltd.