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Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment

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  • Mirco Tonin
  • Michael Vlassopoulos

Abstract

Contributing to a social cause can be an important driver for workers in the public and non-profit sector as well as in firms that engage in Corporate Philanthropy or other Corporate Social Responsibility policies. This paper compares the effectiveness of social incentives - that take the form of a donation received by a charity of the subject’s choice - to financial incentives. We find that social incentives lead to a 13% rise in productivity, regardless of their form (lump sum or related to performance) or strength. The response is strong for subjects with low initial productivity (30%), while high-productivity subjects do not respond. When subjects can choose the mix of incentives half sacrifice some of their private compensation to increase social compensation, with women more likely than men. Furthermore, offering subjects some discretion in choosing their own payment scheme leads to a substantial improvement in performance. Comparing social incentives to an equally costly increase in private compensation for low productivity subjects reveals that the former are less effective in increasing productivity, but the difference is small and not statistically significant.

Suggested Citation

  • Mirco Tonin & Michael Vlassopoulos, 2014. "Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment," CESifo Working Paper Series 4778, CESifo.
  • Handle: RePEc:ces:ceswps:_4778
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    Citations

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    Cited by:

    1. Gosnell, Greer & Metcalfe, Robert & List, John A, 2016. "A new approach to an age-old problem: solving externalities by incenting workers directly," LSE Research Online Documents on Economics 84331, London School of Economics and Political Science, LSE Library.
    2. Xiaoyang Li & Yue Maggie Zhou, 2016. "Offshoring Pollution While Offshoring Production," Working Papers 16-09r, Center for Economic Studies, U.S. Census Bureau.
    3. Briscese, Guglielmo & Slonim, Robert L. & Feltovich, Nicholas, 2019. "Who Benefits from Corporate Social Responsibility?," Working Papers 2019-18, University of Sydney, School of Economics.
    4. Butz, Britta & Harbring, Christine, 2020. "Donations as an incentive for cooperation in public good games," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 85(C).
    5. Sheheryar Banuri & Philip Keefer & Damien de Walque, 2017. "Love the job... or the patient? Task vs. mission-based motiviations in healthcare," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-09, School of Economics, University of East Anglia, Norwich, UK..
    6. Gauriot, Romain & Heger, Stephanie A. & Slonim, Robert, 2018. "Altruism or Diminishing Marginal Utility?," IZA Discussion Papers 11721, Institute of Labor Economics (IZA).
    7. Xiaoyang Li & Yue M. Zhou, 2017. "Offshoring Pollution while Offshoring Production?," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2310-2329, November.
    8. Koppel, Hannes & Regner, Tobias, 2019. "What drives motivated agents: The ‘right’ mission or sharing it with the principal?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    9. Xiaoyang Li & Yue Maggie Zhou, 2016. "Offshoring Pollution While Offshoring Production," Working Papers 16-09, Center for Economic Studies, U.S. Census Bureau.
    10. Ming Jia & Zhe Zhang, 2018. "The Role of Corporate Donations in Chinese Political Markets," Journal of Business Ethics, Springer, vol. 153(2), pages 519-545, December.
    11. Lea Cassar, 2014. "Job mission as a substitute for monetary incentives: experimental evidence," ECON - Working Papers 177, Department of Economics - University of Zurich.
    12. Adena, Maja & Huck, Steffen, 2019. "Can mass fundraising harm your core business? A field experiment on how fundraising affects ticket sales," Discussion Papers, Research Unit: Economics of Change SP II 2019-304, WZB Berlin Social Science Center.

    More about this item

    Keywords

    financial incentives; social incentives; prosocial behavior; real effort experiment; corporate philanthropy; corporate social responsibility; gender;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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