Arbeitspapier
Do markets love misery? Stock prices and corporate philanthropic disaster response
While companies have emerged as very proactive donors in the wake of recent major disasters like Hurricane Katrina, it remains unclear whether that corporate generosity generates benefits to firms themselves. The literature on strategic philanthropy suggests that such philanthropic behavior may be valuable because it can generate direct and indirect benefits to the firm, yet it is not known whether investors interpret donations in this way. We develop hypotheses linking the strategic character of donations to positive abnormal returns. Using event study methodology, we investigate stock market reactions to corporate donation announcements by 108 US firms made in response to Hurricane Katrina. We then use regression analysis to examine if our hypothesized predictors are associated with positive abnormal returns. Our results show that overall, corporate donations were linked to neither positive nor negative abnormal returns. We do, however, see that a number of factors moderate the relationship between donation announcements and abnormal stock returns. Implications for theory and practice are discussed.
- Sprache
-
Englisch
- Erschienen in
-
Series: CFS Working Paper ; No. 2008/10
- Klassifikation
-
Wirtschaft
Information and Market Efficiency; Event Studies; Insider Trading
Business Economics
- Thema
-
Corporate Philanthropy
Disasters
Event Study
Market Value
Hurricane Katrina
Wohltätigkeit
Unternehmenspolitik
Ankündigungseffekt
Börsenkurs
Kapitalertrag
USA
Naturkatastrophe
Katastrophenschaden
New Orleans (La.)
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Muller, Alan
Kräussl, Roman
- Ereignis
-
Veröffentlichung
- (wer)
-
Goethe University Frankfurt, Center for Financial Studies (CFS)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2007
- Handle
- URN
-
urn:nbn:de:hebis:30-54383
- Letzte Aktualisierung
-
20.09.2024, 08:24 MESZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Muller, Alan
- Kräussl, Roman
- Goethe University Frankfurt, Center for Financial Studies (CFS)
Entstanden
- 2007
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