Social capital during the coronavirus pandemic: the value of corporate benevolence

In this paper, we explore market reaction to announcements of corporate donations associated with the COVID-19 crisis. Companies with larger firm size, higher leverage, higher institutional ownership, and higher ESG rankings are more likely to donate COVID relief. We observe statistically significant positive abnormal returns over the event window, driven by a subsample of community relief funds. Our results support the notion of a strategic, reputational premium for participating firms. Consistent with signalling theory, we find firms without ESG scores show positive share price responses to corporate benevolence announcements. This finding suggests the market is less likely to anticipate corporate acts of benevolence from firms with missing ESG scores. Our findings suggest that the market positively reacts to corporate philanthropy news during a crisis. The strongest stock market reaction is related to those firms with missing or less favourable ESG scores.

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Work Title Social capital during the coronavirus pandemic: the value of corporate benevolence
Access
Open Access
Creators
  1. Greg Filbeck
  2. Eric Robbins
  3. Xin Zhao
Keyword
  1. COVID-19
  2. ESG
  3. Social capital
  4. Corporate benevolence
  5. Social responsibility
License In Copyright (Rights Reserved)
Work Type Article
Publisher
  1. Applied Economics
Publication Date September 19, 2021
Publisher Identifier (DOI)
  1. https://doi.org/10.1080/00036846.2021.1977773
Deposited February 17, 2023

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Version 1
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  • Created
  • Added Filbeck_2022_Social_capital_during_the_coronavirus_pandemic_the_value_of_corporate_benevolence.pdf
  • Added Creator Greg Filbeck
  • Added Creator Eric Robbins
  • Added Creator Eric Robbins
  • Added Creator X Zhao
  • Added Creator Xin Zhao
  • Added Creator M Filbeck
  • Published
  • Updated Keyword, Publication Date Show Changes
    Keyword
    • COVID-19, ESG, Social capital, Corporate benevolence, Social responsibility
    Publication Date
    • 2021-09-01
    • 2021-09-19
  • Deleted Creator Eric Robbins
  • Deleted Creator X Zhao
  • Deleted Creator M Filbeck
  • Updated Creator Xin Zhao
  • Updated