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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27477
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| Title: | Is Doing Good Good for You? Yes, Charitable Contributions Enhance
Revenue Growth |
| Authors: | Lev, Baruch
Petrovits, Christine
Radhakrishnan, Suresh |
| Issue Date: | Jul-2006 |
| Series/Report no.: | Christine Petrovits-01 |
| Abstract: | A key question concerning socially responsible corporate activities is
whether such actions achieve traditional goals, such as profit
maximization and shareholder value creation, or whether such activities
represent a drain on resources by opportunistic managers. Much of the
debate about the legitimacy of and justification for socially
responsible activities would be settled if it is convincingly shown that
they further traditional business goals. In this study we provide such
evidence. Using a large sample of charitable contributions made by
public companies from 1989 through 2000, and a statistical methodology
that distinguishes causation from association, we document that
charitable contributions enhance the future revenue growth of the
donors. In particular, we find evidence that, for firms in industries
that are highly sensitive to consumer perception, corporate giving is
associated with subsequent sales growth. On the other hand, our results
do not provide strong evidence that revenue growth drives future
charitable giving. |
| URI: | http://hdl.handle.net/2451/27477 |
| Appears in Collections: | Accounting Working Papers
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