corporate philanthropy ownership type and financial transparency drawing on stakeholder theory and the concept of enlightened self interest we argue that firms that actively engage in corporate philanthropic giving also tend to demonstrate greater concern for investors interests by providing more transparent financial information and avoiding corporate misconduct moreover the relationships between corporate giving financial information transparency and corporate misconduct vary significantly according to the firm s ownership type which affects the fundamental motivations for corporate philanthropy in a sample of chinese publicly listed firms from the 2003 2009 period we find a positive relationship between corporate giving and financial transparency and note that the relationship is stronger for non state owned enterprises non soes we also find a significantly negative association between corporate giving and corporate misconduct for non soes but not for soes taken together these findings suggest that responsibility to both stakeholders and shareholders is a vital part of building trust and reputations in china s non soe sector

market efficiency and insider trading new evidence that corporate insiders earn profits from stock trading does not surprise most financial economists but that outsiders can earn abnormal returns by using pub licly available insider trading data constitutes a serious exception to stock market efficiency the authors show that this anomaly conti nues to exist despite the publication of studies attesting to its exi stence they suggest that the anomalous profits to outsiders are a ma nifestation of the size and earnings price ratio effects controlling for these factors reduces outsider profits by half the additional a ssumption of a 2 percent transactions cost makes outsider profits zer o or negative insider profits after an assumed 2 percent transactio ns cost are a moderate 3 percent per annum for annual holding period s copyright 1988 by the university of chicago

corporate philanthropic disaster response and ownership type evidence from chinese firms response to the sichuan earthquake this article examines whether the charitable giving amount and likelihood of firm response to catastrophic events relate to firms ownership type using a unique dataset of listed firms in china where state ownership is still prevalent based on the data of chinese firms response to the 2008 sichuan earthquake we find that the extent of corporate contributions for state owned firms following this disaster is less than that for private firms state owned firms are also less likely to respond in this disaster compared to private firms the results also reveal that firm size profitability geography cash resource available and leverage affect firms philanthropic disaster response behavior in china

what drives corporate social performance the role of nation level institutions based on whitley s national business systems nbs institutional framework we theorize about and empirically investigate the impact of nation level institutions on firms corporate social performance csp using a sample of firms from 42 countries spanning seven years we construct an annual composite csp index for each firm based on social and environmental metrics we find that the political system followed by the labor and education system and the cultural system are the most important nbs categories of institutions that impact csp interestingly the financial system appears to have a relatively less significant impact we discuss implications for research practice and policymaking

the corporation tax elasticity of charitable donations abstract with the continued downward pressure on corporation tax rates this paper analyses the corporation tax elasticity of donations there is strong evidence of an inverted u shape relationship between corporation tax rates and donations donations are initially increasing at a decreasing rate as a function of the corporation tax rate and are maximised at a rate of 27 percent between 2014 and 2018 the uk corporation tax rate decreased from 21 percent to 19 percent our results indicate that ceteris paribus this equates to a 34 percent decrease in an average uk firm s donations as corporation tax rates continue to decline the potential revenue implications for charities are increasing in importance the evidence also supports the theory of management utility maximisation as a determinant of corporate giving

corporate social responsibility of the most highly reputed european and north american firms the objective of this article is double first to analyze using a descriptive analysis the main differences in the level and components of social behaviour between european and north american firms and second to contrast empirically using a multiple linear regression model whether the motives behind corporate social behaviour are different depending on the region or country of the firm with this aim an indicator of social behaviour termed effort in sustainability has been constructed by aggregating the firm s social effort with customers employees community and environment for a sample of the 40 european and north american companies most highly reputed in the years 2003 and 2004 the results obtained indicate that the region or country of the firm influences the level components and motivation of its social behaviour

using state pension shocks to estimate fiscal multipliers since the great recession has government spending raised income and employment since 2008 i use new data on state pension returns during the great recession to recover exogenous changes in spending instrumenting with these return shocks i estimate that each dollar of windfall financed spending raised local incomes by 1 43 and every additional 22 011 of spending created one contemporaneous job these estimates are similar to those found in shoag 2010 despite the non overlapping datasets unlike shoag 2010 however the bulk of the employment increase post 2008 stems from decreases in unemployment rather than increased labor force participation

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

retailing public goods the economics of corporate social responsibility abstract this paper explores the feasibility and desirability of corporate social responsibility csr we identify csr with creation of public goods or curtailment of public bads using a model with profit maximizing firms the paper shows that there is a direct parallel between csr and traditional models of private provision of public goods indeed firms that use csr will produce public goods at exactly the same level as predicted by the standard voluntary contribution equilibrium for public goods we compare csr with government provision and charitable provision discussing when csr by private for profit firms could have a comparative advantage in dealing with public goods provision

market structure and corporate charitable donations some canadian evidence for 1976 and 1981 the business of business not charity say eleemosynary its more confusing whatever as long as we don t given em any cash harv antione the buzz words of entrepreneurship in apocryphal northern tales this paper investigates the general determinants of corporate charitable donations in canada and in particular the impact of imperfectly competitive market structure we utilize a profit maximizing model and assume that charitable donations occur only if by performing an advertising public relations function they increase revenue or if by acting as a fringe benefit they result in a reduction in wage costs in this context because only firms in imperfect markets generate the rents from which donations can be made we anticipate a positive relationship between donations and a measure of imperfect competition concentration the data is a cross section sample of 38 3 and 4 digit sic manufacturing industries pooled for 1976 and 1981 the major findings are that the results are generally compatib

corporate social responsibility stock prices and tax policy we model a market in which some investors get utility from owning shares of firms that engage in corporate social responsibility csr in equilibrium investors csr considerations influence portfolio choices stock prices and csr spending we study tax policy designed to maximize total giving individual and corporate net of government tax breaks and find that its effectiveness is non monotonic in the proportion of altruistic investors with few or many altruistic investors it has little impact on giving but at intermediate levels effective tax policy intuitively relates the corporate tax rebate rate on giving and the cap on allowable tax savings

seeking legitimacy through csr institutional pressures and corporate responses of multinationals in sri lanka arguably the corporate social responsibility csr practices of multinational enterprises mnes are influenced by a wide range of both internal and external factors perhaps most critical among the exogenous forces operating on mnes are those exerted by state and other key institutional actors in host countries crucially academic research conducted to date offers little data about how mnes use their csr activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries this paper addresses that gap by exploring interactions between external institutional pressures and firm level csr activities which take the form of community initiatives to examine how mnes develop their legitimacy seeking policies and practices in focusing on a developing country sri lanka this paper provides valuable insights into how mnes instrumentally utilise community initiatives in a country where relationship building with governmental and other powerful non governmental actors can be vitally important for the long term viability of the business drawing on neo institutional theory and csr literature this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of csr the evidence presented and discussed here reveals the extent to which and the reasons why mnes engage in complex legitimacy seeking relationships with sri lankan host institutions

the geography of giving the effect of corporate headquarters on local charities abstract does the presence of corporate headquarters in a city affect the incomes of local charities to address this question we combine data on the head office locations of publicly traded u s firms with information on the receipts of local charitable organizations cities like houston san jose and san francisco gained significant numbers of corporate headquarters over the past two decades while cities like chicago and los angeles lost our analysis suggests that attracting or retaining the headquarters of a publicly traded firm yields approximately 3 10 million per year in contributions to local non profits likewise each 1000 increase in the market value of the firms headquartered in a city yields 0 60 1 60 to local non profits most of the increase in charitable contributions is attributable to an effect on the number of highly compensated individuals in a city rather than through direct donations by the corporations themselves the increased private sector donations from the presence of corporate headquarters do not seem to crowd out government grants to local charities

profit maximisation vs agency an analysis of charitable giving by uk firms the charitable giving of a large sample of publicly quoted uk firms is analysed within a model that explores the profit maximisation and managerial utility enhancement motives for giving the empirical method draws a distinction between the decision to participate in giving and the determination of the amount of corporate contributions firm size and advertising intensity are found to be positively associated with the probability of participation in giving stricter corporate governance and the rate of directors remuneration are negatively related to the probability of participation among givers the rate of giving is related positively to r d intensity the rate of directors remuneration and corporate profitability and negatively to firm indebtedness

the impact of operational diversity on corporate philanthropy an empirical study of u s companies this paper investigates the impact of diversity on corporate philanthropy compared to previous studies that have considered the influence of board diversity and ceo gender on corporate philanthropy this study introduces the concept of operational diversity which is the implementation of diversity programs at management employee and supply chain levels and further it explains why operational diversity influences corporate philanthropy by using the premises of resource dependence theory second this study also investigates the influence of board diversity on corporate philanthropy third this study uses a large sample of u s firms over the period of 1991 2009 and tries to mitigate possible omitted variables and endogeneity problems that are often overlooked in previous research we demonstrate that firms with operational diversity programs are likely more dependent on a broad variety of resources and give more to community as a strategic maneuver hence operational diversity is a better indicator for predicting future corporate giving than board diversity alone however having a woman or a member of a minority as a company s chief executive officer is not sufficient to impact its charitable giving a battery of robustness tests support our conclusion and confirm that our results are not driven by a firm s general corporate social responsibility csr score gender or independence of board members or firm ownership this paper will assist researchers practitioners and other stakeholders in deepening their understanding of the predictors of corporate giving

corporate philanthropic giving advertising intensity and industry competition level this article examines whether the likelihood and amount of firm charitable giving in response to catastrophic events are related to firm advertising intensity and whether industry competition level moderates this relationship using data on chinese firms philanthropic response to the 2008 sichuan earthquake we find that firm advertising intensity is positively associated with both the probability and the amount of corporate giving the results also indicate that this positive advertising intensity philanthropic giving relationship is stronger in competitive industries and firms in competitive industries are more likely to donate this study thus provides evidence suggesting that even in the wake of catastrophic events corporate philanthropic giving is strategic

the role of comparative costs for determining inter and intra industry trade with developing countries abstract the paper studies intra industry trade of sweden with developing countries it uses a neoclassical two factor multi sector model where it is assumed that goods are differentiated with respect to country of origin in this model the share of intra industry trade between countries with different relative factor prices will be low in sectors with extreme factor requirements i e with very high or very low capital intensity this hypothesis is tested on the share of intra industry trade in sweden s trade with developing countries for a cross section of industries and largely confirmed by the statistical results

an absence of transparency the charitable and political contributions of us corporations although stockholders may benefit from information regarding the frequently substantial charitable and political contributions of the corporations they own us corporations are typically not required to disclose any information about such payments in annual financial statements or information submitted periodically to regulatory agencies this lack of transparency is confounded by disclosure requirements of private foundations which a corporation may choose to establish for the purposes of administering charitable giving for the corporation the resulting disclosure fog engendered by extant regulations may be confusing to those corporation owners who would like to know what corporation contributions are being made to charities and politicians this article enumerates the magnitude of the charitable and political gifts of 40 of the most generous public corporations in the usa the current disclosure requirements for public companies the role of foundations rationales for withholding relevant information from owners and ethically questionable strategies that corporations may use to manage those disclosures for their benefit

the effects of firm size and industry on corporate giving recent downward trends in corporate giving have renewed interest in the factors that shape corporate philanthropy this paper examines the relationships between charitable contributions firm size and industry improvements over previous studies include an irs data base that covers a much broader range of firm sizes and industries as compared to previous studies and estimation using an instrumental variable technique that explicitly addresses potential simultaneity between charitable contributions and profitability important findings provide evidence of a cubic relationship between charitable giving and firm size and evidence of strong industry effects the plus minus plus regression coefficient sign pattern for the cubic firm size model suggests that small and large firms give more relative to total receipts with lower giving ratios among medium size firms one interpretation for this finding is that small firms are close to the communities they serve while high visibility creates a need for large firm philanthropy strong industry effects provide evidence of inter industry differences in giving culture and or different public relations requirements across industries

do political connections buffer firms from or bind firms to the government a study of corporate charitable donations of chinese firms do political connections buffer firms from or bind firms to the government to examine this theoretical puzzle we distinguish two types of managerial political connections ascribed and achieved

collaboration in the boardroom behavioral and performance consequences of ceo board social ties empirical research has typically rested on the assumption that board independence from management enhances board effectiveness in administering firms the present study shows how and when a lack of social independence can increase board involvement and firm performance by raising the frequency of advice and counsel interactions between ceos and outside directors hypotheses were tested with original survey data from 243 ceos and 564 outside directors on behavioral processes and dynamics in management board relationships

the value of corporate philanthropy during times of crisis the sensegiving effect of employee involvement recent research suggests that philanthropy s value to the firm is largely mediated by contextual factors such as managers assumed motives for charity our article extends this contingency perspective using a sensegiving lens by which external actors interpretations of organizational actions may be influenced by the way in which the organization communicates about those actions we consider how sensegiving features in philanthropy related press releases affect whether investors value those donation decisions for the empirical investigation in this study we analyze abnormal returns to announcements by u s fortune 500 firms documenting their donations to hurricane katrina disaster relief in 2005 we expect that in general donation decisions would be controversial given the uncertainty surrounding the hurricane s economic effects at the time however we also propose that announcements emphasizing employee involvement in the donation send investors positive signals about the firm s ability to bounce back from the disaster s adverse effects we find empirical support for the proposed hypotheses and discuss the implications for theory and practice

ownership structure board composition and the market for corporate control in the uk an empirical analysis this paper analyses the board composition and ownership structures of a sample of companies that have been acquired and those of a matching control sample that have not we find significant governance differences between acquired firms and the control sample firms with the following characteristics were more likely to be acquired they had the same person acting as ceo and chair a higher proportion of non executive directors larger institutional shareholdings and higher director shareholdings an analysis of small firms also found evidence of higher ceo shareholdings we also find that treating all take overs as a single group leads to a model mis specification which does not identify the incentive effects of board and ceo shareholdings present in non hostile acquisitions these results are consistent with two agency derived hypotheses financial incentives and effective monitoring we also find that targets exhibit lower growth potential but do not have worse accounting performance

valuation effect of emotionality in corporate philanthropy despite receiving a great deal of research attention the effect of corporate philanthropy on shareholder value remains inconclusive to address this issue the present paper examines emotionality as an important factor based on which investors infer about the firm s motive as well as the beneficiary s worthiness and react accordingly consistent with attribution theory our event study shows that announcements with more emotional expressions are associated with higher cumulative abnormal stock returns and the effect is stronger when investor attention is greater we further find that the positive interaction effect between emotionality and investor attention is more pronounced for scandal free firms than for firms with corporate social irresponsibility csi the empirical evidence remains consistent under various robustness tests the paper concludes with implications for future research and managerial practices

shareholder wealth maximization business ethics and social responsibility the primary objective of this article is to develop a framework for analyzing the ethical foundations and implications of shareholder wealth maximization swm distinctions between swm and the more widely examined construct of profit maximization are identified the most significant being the central role played in swm by the market mechanism for pricing the corporation s securities it is argued that empirical tests concerned with evaluating the ethical implications of swm will almost surely involve a joint hypothesis a number of recent empirical studies aimed at testing hypotheses with explicit ethical content are reviewed

equilibrium with product differentiation tive consumer formulations is used to examine the properties of single and multiple price equilibria conditions under which decreases in the intensity of consumer preferences reduce price are given it is shown that with certain types of demand curves entry can eliminate price cost markups even given product differentiation if competition is localized it is demonstrated that entry does not affect the markup finally the effect of spurious product differentiation on price is examined

the effect of organizational form on quality the case of franchising abstract the organizational form of franchising has been shown to yield higher profits and faster growth through reducing agency costs why then does anyone not franchise in this paper i argue that the diffuse residual claims of the franchise system reduce overall system quality and that this problem is inherent in the nature of franchising the theory is tested by examining evidence from both the restaurant and the hotel industries including chains that franchise and ones that own all of their units in both industries quality is negatively related to the percent franchising in the chain controlling for size growth in units monitoring costs market segment ownership structure multi chain operation and price the results suggest that the franchise contract increases free riding and decreases quality in decentralized service chains and that quality is not contractible in this setting

does the market value corporate philanthropy evidence from the response to the 2004 tsunami relief effort this study investigates the market reaction to corporate press releases announcing donations to the relief effort following the december 2004 tsunami in southeast asia based on a sample of 79 u s companies results indicate a statistically significant positive 5 day cumulative abnormal return while differences in the timing of the press releases do not appear to have influenced market reactions the amount of the donations did overall the results appear to support godfrey s academy of management review30 777 798 2005 assertion that philanthropic giving must be perceived as being a genuine manifestation of the firm s underlying social responsiveness in order to increase firm value

macroeconomic effects from government purchases and taxes for u s annual data that include world war ii the estimated multiplier for temporary defense spending is 0 4 0 5 contemporaneously and 0 6 0 7 over 2 years if the change in defense spending is permanent gauged by ramey s defense news variable the multipliers are higher by 0 1 0 2 since all estimated multipliers are significantly less than 1 greater spending crowds out other components of gdp particularly investment the lack of good instruments prevents estimation of reliable multipliers for nondefense purchases multipliers in the literature of two or more likely reflect reverse causation from gdp to nondefense purchases increases in average marginal income tax rates measured by a newly constructed time series have significantly negative effects on gdp when interpreted as a tax multiplier the magnitude is around 1 1 the combination of the estimated spending and tax multipliers implies that the balanced budget multiplier for defense spending is negative we have some evidence that tax changes affect gdp mainly through substitution effects rather than wealth effects

corporate social and financial performance an investigation in the u k supermarket industry the comparison of corporate social performance with corporate financial performance has been a popular field of study over the past 25 years the results while broadly conclusive of a positive relationship are not entirely consistent in addition most of the previous studies have concentrated on large scale cross industry studies and often with a single variable for corporate social performance in order to produce statistically significant results this weakens the richness of understanding that might be obtained from a single industry study with multiple social variables which would also allow investigation of inter relationships between individual and sub sets of social performance measures and between individual and sub sets of social performance and financial performance measures there have also been criticisms that the results lack a rigorous theoretical basis and the paper demonstrates clearly how stakeholder theory must form the basis for this area of research following a review of the literature this paper presents the initial findings from a study of the u k supermarket industry which suggest that contemporaneous social and financial performance are negatively related while prior period financial performance is positively related with subsequent social performance positive relationships between both age and size of the company with social performance are also found

a cup runneth over fiscal policy spillovers from the 2009 recovery act this article studies the effects of interregional spillovers from the american recovery and reinvestment act of 2009 the recovery act using cross county commuting data we cluster us counties into local labour markets each of which we further partition into two subregions we then compare differential labour market outcomes and recovery act spending at the regional and subregional levels among pairs of subregions we find evidence of fiscal policy spillovers according to our benchmark specification 1 of recovery act spending in a subregion increases its own wage bill by 0 64 and increases the wage bill in its neighbouring subregion by 0 50 during the first two years following the act s passage the spillover effect occurs in the service sector whereas the direct effect occurs in both the services and goods producing sector

fiscal policy in an unemployment crisis this paper shows that large scal multipliers arise naturally from equilibrium unemployment dynamics in response to a shock that brings the economy into a liquidity trap an expansion in government spending increases output and causes a fall in the unemployment rate since movements in unemployment are persistent the eects of current spending linger into the future leading to an enduring rise in income as an enduring rise in income boosts private demand even a temporary increase in government spending sets in motion a virtuous employment spending spiral with a large associated multiplier this transmission mechanism contrasts with the conventional view in which scal policy may be ecacious only under a prolonged and committed rise in government spending which engineers a spiral of increasing ination

corporate philanthropy in the u k 1985 2000 some empirical findings this paper briefly reviews the theories that seek to explain the phenomenon of corporate charitable donations and then provides a review of the empirical issues that have arisen in previous studies in this area the findings of an analysis of charitable donations data from the entire u k ftse index for the years 1985 2000 are then reported these findings include the observation of a time related increase in charitable donations which is compared with an earlier study to give a 24 year history of charitable donations in the u k the findings note little responsiveness of the monetary value of charitable donations to the economic performance of firms an international comparison over time against u s trends is also reported and shows how u s corporations have traditionally been more generous than u k firms but that the trend in the u s is downwards membership of a u k based tithing club the percent club is shown to be associated with higher profit performance against non members members charitable contributions against profit are shown to be higher than the ftse mean although short of the 0 5 target figure in cash terms the paper concludes with a brief discussion of these findings in relation to the theoretical positions advanced for corporate philanthropy

the integration of the market for soybeans and soybean products abstract this article addresses the question of whether soybeans soybean meal and soybean oil produced in the usa and exported were part of a single world geographic market during the decade of the 1980s an answer to this question is sought using an approach to defining a geographic market based on the notion of instantaneous causality the empirical results based on prices for soybeans soybean meal and soybean oil for three spatially diffuse locations suggest that there was but a single identifiable world market for these commodities over the period of study this has implications for the continued presence of soybean production subsidies and discussions on international agreements designed to reduce or eliminate these subsidies

information structures of product markets buyers demand continuing information flows to guide their choices among competing product brands they select portfolios of information types some supplied by sellers of the branded goods some not this paper investigates the determinants of businesses outlays on information media advertising sales force other sales promotion they include buyers overall demands for information buyers access to sources not controlled by the seller the relative efficiency of seller supplied information and competitive conditions in the product market the hypotheses about effects on sellers total information outlays are strongly supported some evidence appears on determinants of the mixture of information types they provide

corporate donations and shareholder value do corporate donations enhance shareholder wealth or reflect agency problems we address this question for a global sample of firms whereby we distinguish between charitable and political donations as well as between donations in cash and in kind we find that charitable donations are positively related to financial performance and firm value which is consistent with the value enhancement hypothesis this positive effect on firm value is stronger for cash than in kind donations in contrast political donations do not appear to enhance shareholder value but rather tend to reflect agency problems as they are higher for firms with poor internal corporate governance and strong managerial entrenchment we address endogeneity concerns by using peer firms donations as an instrument in a two stage least squares 2sls setting and by conducting a difference in difference analysis around a general election

campaign contributions as investments the u s house of representatives 1980 1986 this paper treats the market for special interest campaign contributions and political favors as a simple asset market the model yields a simple equilibrium relationship among three variables the total amount of investor contributions a candidate receives the monetary value of the favors he has promised and his probability of winning using data on open seat races for the u s house of representatives i confront the model with a series of tests despite the starkness of the model the results of these tests are highly supportive

what is product differentiation really empirical research on industrial organization has failed to identify the empirical bases of product differentiation that is each seller facing an individual downward sloping demand curve two sets of conditions are theoretically sufficient one resting on complex attribute structures coupled with fixed costs the other on costs of information to guide buyers choices among brands factor analysis of observable decision variables and market patterns appears to reveal and confirm these underlying causes the estimated factors perform successfully to test hypotheses about the effects of product differentiation on the mutual sensitivity of prices of australian domestic manufactures and competing imports product differentiation is a well defined theoretical concept resting on

campaign contributions and access an important and pervasive view of campaign contributions is that they are given to promote access to successful candidates under circumstances when such access would not ordinarily be given in this story access is valuable as it offers groups the opportunity to influence legislative decisions through the provision of policy relevant information under complete information regarding donors policy preferences i argue that this model predicts a negative relationship between contributions and the extent to which the groups and the recipient legislators preferences are similar however one of the more robust empirical findings in the literature is that this relationship is positive relaxing the informational assumption on donors preferences i reexamine the access story with a model in which campaign contributions can act as signals of policy preference and the informational value of access to any agent is endogenous

international trade and industrial organization this survey reviews recent contributions to the interface between international trade and industrial organization import competition places a substantial limit on domestic market power in the short run competitive conditions can influence the speed and efficiency of a domestic market s adjustment to international disturbances exports effects on competition among national sellers are unclear and depend on the scope for price discrimination models of trade with monopolistic competition explain intra industry trade and also the widely observed sensitivity of firm size to market size exposure to trade also increases the technical efficiency of production diverse policy issues turn on the distinction between national and global welfare and the scope for commitment

do suppliers applaud corporate social performance the influence of corporate social performance csp on stakeholders is one of the focal issues in corporate social responsibility csr research using data of listed companies in china this paper examines whether csr behavior in the form of charitable donations garners a positive reaction from suppliers results derived from both level and change model regressions show that superior csp makes it easier for a firm to obtain trade credit from suppliers although the effect is significant only in non state owned enterprises non soes the results are robust to various measures of csp and endogeneity tests the results support the strategic philanthropy view and apply stakeholder theory in supply chain that strategic csr can help firms to attract suppliers and consolidate cooperative relationships with them which in turn benefits the firms in terms of more trade credit financing from suppliers this paper also shows that state owned enterprises and non soes have different csr intentions and use csr to achieve strategic goals in different ways the conclusions drawn from this study provide practical guidance on csr strategy suggesting that csr activities can help a firm in transition economies to enhance its corporate image establish and consolidate the good relationship with suppliers and obtain economic benefits or achieve long term business objectives

pacs and the congressional supermarket the currency is complex although pacs attempt to influence the legislative process with contributions this research finds little evidence that the contributions of 120 pacs affiliated with 10 organizations affected the voting patterns of the house members who served continuously from 1975 to 1982 in the few cases in which a relationship between contributions and a member s votes is established the analysis indicates that contributions are a surrogate measure of a more important and larger package of support for the member from the interest groups two stage least squares regression models are used to test the relationship between pac contributions and a member s votes controlling for the incumbent s ideology and party and the political leaning of the district interviews with pac officials supplement the statistical analysis

corporate reputation and philanthropy an empirical analysis this paper analyzes the determinants of corporate reputation within a sample of large uk companies drawn from a diverse range of industries we pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries given that reputational indices tend to reflect the financial performance of organizations above other factors fryxell g e and j wang 1994 journal of management 20 1 14 and that elements of the literature emphasise that discretionary aspects of social responsibility including corporate donations may not be in the financial interests of organizations e g friedman m 1970 the social responsibility of business is to increase its profits new york times magazine september 13 this is a significant finding it suggests that philanthropic expenditures may play a significant role in stakeholder management and may in particular lead to stakeholders holding more positive impressions of philanthropic corporations

imperfect duties and corporate philanthropy a kantian approach nonprofit organizations play a crucial role in society unfortunately many such organizations are chronically underfunded and struggle to meet their objectives these facts have significant implications for corporate philanthropy and kant s notion of imperfect duties under the concept of imperfect duties businesses would have wide discretion regarding which charities receive donations how much money to give and when such donations take place a perceived problem with imperfect duties is that they can lead to moral laxity that is a failure on the part of businesses to fulfill their financial obligations to nonprofit organizations this article argues the problem of moral laxity rests on a misinterpretation of kantian ethics and therefore is really not a problem at all as such we argue corporate philanthropy while an imperfect duty should be interpreted more akin to perfect duties and as a consequence moral laxity does not arise for those corporations committed to acting on the basis of the moral law more specifically firms have duty based obligations on the basis of benevolence and as good corporate citizens to help fund non profit organizations

import share under international oligopoly with differentiated products japanese imports in u s manufacturing this paper seeks to identify the determinants of the japanese impor t share in the u s market from the assumptions of international oligopoly and internationally differentiated products a theoretical model is developed where import share is considered as a cournot nash equilibrium the relative position of the reaction functions is determined by the previous commitments of both domestic and foreign firms on advertising r d and tangible investment as well as by artificial and natural trade barriers using a sample of twenty four three digit import competing u s industries matched to japanese industries the empirical analysis provides evidence supporting the model s predictions that the relative strategic expenditures and market structures of both partners explain the japanese import share in u s markets copyright 1988 by mit press

corporate sponsored foundations and earnings management abstract this study examines the strategic use of corporate philanthropy programs to achieve financial reporting objectives corporate sponsored foundations allow managers to maintain stable levels of giving to charitable causes while providing substantial discretion as to the amount of contribution expense recorded on the income statement in any given period i find that firms reporting small earnings increases make income increasing discretionary foundation funding choices this result is associated with firms that have strong equity market incentives to manage earnings the evidence presented in this paper is consistent with firms using their charitable foundations as off balance sheet reserves

macroeconomic effects of government spending the great recession was really different we estimate the effect of government spending shocks on the u s economy with a time varying parameter vector autoregression the recent great recession period appears to be characterized by uniquely large impulse responses of output to fiscal shocks moreover the particularity of this period is underlined by highly unusual responses of several other variables the pattern of fiscal shock responses neither completely fits the predictions of the new keynesian model of an economy subject to the zero lower bound on nominal interest rates nor does it suggest regular variation of fiscal policy effects depending on the state of the business cycle rather the great recession period seems special in that government spending shocks had a strongly negative effect on the spread between corporate and government bond yields and a strongly positive effect on consumer confidence and private consumption spending

the economic effects of public financing evidence from municipal bond ratings recalibration we show that the supply of local public financing can have important effects on local economies we identify these effects by exploiting exogenous variation on municipal bond ratings due to moody s recalibration of its scale in 2010 we find that local governments increase expenditures and employment due to an expansion of their debt capacity following an upgrade these increases in local government spending lead to multiplier effects on non tradable employment and income our findings suggest that debt financed increases in government spending can improve economic conditions during recessions

insider trading and the value of the firm previous studies of insider trading have examined the profitability to executives of their stock trading with a view to evaluating the informational efficiency of securities markets the authors examine empirically whether insider trading raises or lowers firm value to correctly identify the effects on firm value at the margin they correct for the simultaneity of earnings insider holdings and the amount of insider trading the authors explicitly deal with simultaneity by using a two part testing procedure their results suggest that insider trading lowers the value of the firm at the margin but that greater executive stock ownership raises the value copyright 1991 by blackwell publishing ltd

a complete solution to a class of principal agent problems with an application to the control of a self managed firm this paper considers a class of principal agent problems which have the following features 1 there is adverse selection because the principal ignores the value of one parameter of the agent s true characteristics 2 leaving aside the information parameter the principal s welfare as well as the agent s welfare depend on two types of variables observable to both of them the first ones possibly multidimensional are called action variable s and the second one which is one dimensional has in general the meaning of a money transfer 3 the principal is a stackelberg leader of the two person game he can commit himself to decision rules which are admissible on informational grounds he optimizes within the adequate class taking into account besides the agent s reaction one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint the optimization is limited to the class of non stochastic mechanisms 4 the problem can also receive an alternative interpretation the principal faces a continuum of agents of unknown characteristics the distribution being known however stylized principal agent problems of this type have often been considered in the economic literature in particular the reader will later be able to recognize that the standard income tax model a la mirrlees 1971 the quality or quantity choice model of the monopolist a la mussa and rosen 1978 or maskin and riley 1982 and the model of government regulation of the private monopolist of baron and myerson 1982 all belong to

advertising and competition in routine legal service markets an empirical investigation this study s findings together with the results of earlier studies of the relationship between advertis ing and market prices provide considerable empirical support for the pro competitive view of seller advertising data on attorney fees an d advertising practices in seventeen metropolitan areas across the u s were used to estimate the effect of market advertising intensity o n firm demand elasticities holding other possible influencing factor s constant the results obtained for all three routine legal services examined are consistent with the hypothesis that advertising increas es competition among sellers in a market copyright 1987 by blackwell publishing ltd

renewable electricity as a differentiated good the case of the republic of korea this paper examines the willingness for korean consumers to pay a premium for renewable electricity under a differentiated good framework by applying the contingent valuation method korean consumers have been required to pay for their use of renewable electricity as of 2012 first we find that korean consumers recognise renewable electricity as a differentiated good from traditional electricity generated from fossil fuels or nuclear energy the mean willingness to pay to use renewable electricity is usd 1 26 per month second we confirm the existence of perfect substitution relationships among variant renewable technologies which suggests that korean consumers do not perceive them as differentiated goods one reason for this perception is that korean consumers are more inclined to favour economic feasibility over sustainability or the availability of the resource stock when choosing between renewable technology types in sum we can say that korean consumers recognise renewable electricity as a differentiated good but that they do not differentiate between variant renewable technologies thus the imposition of the cost of renewable electricity on consumers in the form of increased electricity charges would be acceptable to consumers as long as any price rise properly reflects their preferences

principal principal conflicts and corporate philanthropy evidence from chinese private firms the principal principal perspective suggests that controlling shareholders have excessive influence on corporate philanthropy and may direct corporate funds to charitable causes to support their personal interests analysis of a sample of chinese private firms listed on the shenzhen or shanghai stock exchange between 2004 and 2011 shows that 1 there is a significant and negative relationship between corporate giving and the share held by the largest shareholders suggesting that controlling shareholders are opportunistic in directing corporate charitable contributions 2 there is a significant and positive relationship between corporate giving and the political connections of the largest shareholders and their agents suggesting compatibility between corporate contributions and the personal interests of the controlling shareholders 3 there is a stronger negative relationship between corporate giving and the share of the company held by the largest shareholders in politically connected firms suggesting that political connections contribute to increased opportunistic corporate giving overall our study provides important evidence for the one dominant controlling shareholder phenomenon yigududa by testing and extending the principal principal framework and showing that the largest shareholders of chinese firms appear to donate to charitable causes that ultimately serve their personal interests at the expense of minority shareholders

being better vs being different differentiation competition and pricing strategies in the spanish hotel industry we study the effects of vertical and horizontal differentiation on pricing policy in a large sample of hotels in spain we show that hotels with more stars i e vertically differentiated offer smaller discounts over listed prices in addition to charging higher prices similarly hotels that belong to a branded chain i e horizontal differentiation also charge higher prices and provide smaller discounts we show how the degree of local competition moderates the effect of differentiation on pricing policy but only for vertical differentiation differentiation indeed protects hotels from the pressure to reduce prices as competition increases but being better seems to be more effective than just being different

heterogeneous government spending multipliers in the era surrounding the great recession abstract we use novel quarterly data of u s states to examine the dynamics of relative spending multipliers in the decade surrounding the great recession while multipliers were around 1 in expans

managerial contracting and corporate social responsibility abstract this paper presents a theory of corporate social responsibility in the form of the private provision of public goods and private redistribution by a firm these social expenditures are determined by a manager operating under a compensation contract chosen by shareholders in a capital market that prices social expenditures the theory incorporates three explanations for compensation systems that encompass social performance first consumers may reward the firm for its social expenditures second managers may have personal preferences for contributing to social causes and third the shareholder clientele a firm attracts may prefer social expenditures social incentives are higher powered the more consumers reward the firm and the stronger are shareholders warm glow preferences for social expenditures profit incentives are higher powered the more consumers reward the firm but are independent of shareholder preferences when consumers reward the firm for its social expenditures firms with higher ability managers have both higher operating profits and higher social expenditures when times are good so a positive correlation is predicted in bad times however the correlation is negative except for firms with very low ability managers in very bad times where the correlation is zero

corporate political donations influences from directors networks motivated by contemporary debates concerning whether directors inappropriately deploy corporate funds for corporate political donations and the limited research into managerial influence on corporate political donations we examine the impact of director influences from a network perspective using a sample of large listed australian corporations and their political party donation activity during 2000 2007 we find that both the professional and non professional networks of directors influence corporate political donations we observe these influences in relation to donations at the federal and state levels and with respect to the choice of recipient political parties

social responsiveness profitability and catastrophic events evidence on the corporate philanthropic response to 9 11 in this study we seek to determine whether catastrophic events lead to corporate charitable giving unrelated to levels of firm profitability we examine the issue relative to the corporate philanthropic response to the 9 11 terrorist attacks of 2001 based on a sample of 489 fortune 500 companies we find that differences in the extent of corporate contributions following 9 11 are positively and significantly associated with differences in firms profitability further while the degree of connection to the catastrophic event led to higher levels of giving in comparison to the contributions of less connected firms differences in the extent of philanthropy are still related to short term profitability for the more connected firms the study thus provides evidence suggesting that even in the wake of catastrophic events corporate philanthropic giving is constrained by economic concerns

local and aggregate fiscal policy multipliers abstract using a newly constructed panel of state level defense contracts this paper studies the effect of defense spending on the u s macroeconomy summing observations across states we estimate aggregate income and employment multipliers comparing these to local multipliers estimated with the panel provides evidence that local multiplier estimates may be reliable indicators of fiscal policy s aggregate effects furthermore evidence of small positive spillovers is found across several specifications we estimate income and employment multipliers between zero and 0 5 this result is reconciled with the greater than one multipliers found in nakamura and steinsson 2014 by analyzing the korean war years impact on the estimation

the determinants of industry political activity 1978 1986 c ampaign contributions made by corporate political action committees pacs are increasingly important and controversial in u s elections influence purchasing is often alleged by pundits and campaign finance reform is continually debated in congress in the academy social scientists have analyzed the allocation of interest group monies and have looked for possible impacts on legislation few however have tried to explain the total contributions of economic interest groups we shall analyze variations in contributions across industries and over time with an empirical model based on organizationally constrained profit maximizing behavior we assume that corporate pac contributions in an industry are raised to enhance industry profits subject to the constraints of organization costs and freeriding incentives our empirical work covers 124 industries over five election cycles from 1978 through 1986 both the costs and benefits of political activity vary across industries we argue that the benefits of political action are determined by direct contact with the government as a regulator or purchaser of industry output by government s ability to ameliorate adverse market conditions and by the industry s ability to solve collective action problems without government assistance the costs of industry political action arise mainly from collective action problems because effective political activity often requires concerted action by the constituent firms in each industry we also make a methodological contribution previous studies use statistical techniques that suffer from sample selectivity bias or else force the probability of acting politically to be explained by the same set of coefficients as is the amount of action taken we explain and employ a technique that accounts for both problems the results are consistent with the theses that industries follow investment oriented goals in deciding the amount of political action to undertake and that collective action problems are important constraints on industry political activity we can explain between 60 and 80 of the variation in contributions in our sample first we review existing work on corporate political activity particularly papers examining patterns of aggregate pac spending by industry then we present an organization cost constrained industryprofit maximizing model based on a comparison between an idealized zero organization cost industry and the more realistic case where organizing collective action is difficult the independent variables used in the analysis are also discussed and defined next we discuss the dependent variable and total industry contributions and explain our statistical method then the results are presented followed by a discussion of industry structure and political activity to make clear how our results can explain different contribution patterns we give examples using five actual industries

corporate social responsibility in europe and the u s insights from businesses self presentations the paper compares the extent and content of businesses communications about corporate social responsibility csr in france the netherlands the u k and the u s in particular the study investigates the nature of csr principles processes and stakeholder issues discussed in web pages the results show that businesses in the four countries do not display the same eagerness to appear as socially responsible and employ diverse means to convey social responsibility images

corporate philanthropy and stock price crash risk evidence from china how to mitigate stock price crash risk has become a focus in the theoretical and practical fields building on the work of kim et al j bank finance 43 1 13 2014b this paper investigates the relation between corporate philanthropy and crash risk under the unique chinese institutional background the results show that both state ownership and the 2005 split share reform attenuate the mitigating effect of corporate philanthropy on crash risk specifically the negative relation between corporate philanthropy and crash risk is less pronounced for state owned enterprises than for non state owned enterprises and it is also less pronounced after firms accomplish the split share reform further this effect is more pronounced for firms with greater financial risks and poorer performance our paper contributes to the growing literature on the determinants of stock price crash risk and the economic consequences of corporate philanthropy it also offers useful guidance to firms that are seeking to reduce stock price crash risk in emerging markets

why do corporations give to charity this paper explores whether corporate contributions should be tax dedu ctible within the more general context of an examination of the profi t and utility maximization motives driving contributions the theoret ical section develops a formal structural model of the contributions process illustrates comparative statics and derives a set of empiri cally testable hypotheses using a new source of firm data the empir ical results indicate that profit maximization is an important motive driving contributions this finding supports the current tax deducti ble status of contributions up to a seldom encoun tered ceiling and favors a reform that allows firms to treat contributions as ordinary business expenses copyright 1988 by the university of chicago

liability of foreignness natural disasters and corporate philanthropy this study examines how philanthropy can mitigate liability of foreignness lof in the aftermath of a national disaster a major disaster restructures the social landscape creating an avenue for corporate contributions to play a role in recovery and relief efforts this social restructuring offers a valuable opportunity for multinational enterprises mnes to establish strong local ties in turn mne contributions at such times have a stronger impact on their local acceptance thus mnes can use these events to strengthen their position in the community and mitigate lof using the context of a national disaster in india i test these arguments with a sample of 190 mnes and 660 domestic firms i found that in the aftermath of the disaster the increase in mne contributions was much larger and less strongly tied to promotional activities than the increase in contributions from domestic firms and this difference persisted over time moreover the performance implication of post disaster philanthropy was stronger for mnes than for domestic firms these findings suggest that philanthropy plays a more strategic role for mnes in the aftermath of a disaster and it has a pronounced effect on mitigating lof

donate money but whose an empirical study of ultimate control rights agency problems and corporate philanthropy in china using empirical evidence gathered from chinese listed companies this article explores the relationship between micro governance mechanisms and corporate philanthropy from a corporate governance perspective in china s emerging market ultimate controlling shareholders of state owned enterprises soes are reluctant to donate their assets or resources to charitable organizations in private enterprises pes marked by more deviation in voting and cash flow rights such donations tend to be more likely however the ultimate controllers in pes refuse to donate assets or resources they control or own which implies that corporate philanthropy by pes comes at the cost of others through assets or resources owned by minority shareholders even after devastating natural disasters such as the 2008 wenchuan earthquake the controlling shareholders continue to express reluctance to donate any assets they control despite widespread evidence that corporate philanthropy boosts corporate growth and profitability these ultimate controllers indicate no intention to donate their own money as a means to improve corporate performance