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Selfish Shareholders: Corporate Donations during COVID-19

Author

Listed:
  • Michele Fioretti

    (Département d'économie)

  • Victor Saint-Jean

    (Département d'économie)

  • Simon C Smith

    (Federal Reserve Board)

Abstract

During the onset of the COVID-19 pandemic, conflicting incentives caused most shareholders to adverse corporate social responsibility (CSR) –measured by firms’ charitable donations– since it would further burden firms’ already strained finances. Those shareholders that favored donations, large individual investors, did so to bolster their own images as they are typically synonymous with the donating firms. Image gains do not pass through to institutional shareholders, who instead preferred to donate themselves rather than having the firms they invested in donate. Taken together, our results cast doubts on large corporations’ willingness to demand costly CSR measures across firms in their portfolios.

Suggested Citation

  • Michele Fioretti & Victor Saint-Jean & Simon C Smith, 2021. "Selfish Shareholders: Corporate Donations during COVID-19," Sciences Po Economics Discussion Papers 2021-01, Sciences Po Departement of Economics.
    • Handle: RePEc:spo:wpecon:info:hdl:2441/3t26b67lmf8nnqo12dbjl5bqom
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    File URL: https://spire.sciencespo.fr/hdl:/2441/3t26b67lmf8nnqo12dbjl5bqom/resources/2021-fioretti-saint-jean-and-smith-selfish-shareholders-corporate-donations-during-covid-19.pdf
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    Keywords

    Shareholder influence; Corporate decisions; Charitable donations; COVID-19;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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