Value-Enhancing Social Responsibility: Market Reaction to Donations by Family vs. Non-family Firms with Religious CEOs
Document Type
Article
Abstract
Using a signaling framework, we argue that ethical behavior as evidenced by charitable donations is viewed more positively by investors when seen not to be based on self-serving motives but rather on authentic generosity that builds moral capital. The affirmed religiosity of CEOs may make their ethical position more credible, while their embeddedness within a family business suggests that CEOs are backed by powerful owners with long-time horizons and a desire to build moral capital with stakeholders. We find in a study of market responses to 1572 corporate donations by S&P 1500 firms that financial markets react more positively to charitable initiatives from firms with religion-declared CEOs, but only if these are family businesses.
Publication Title
Journal of Business Ethics
Publication Date
5-1-2020
Volume
163
Issue
4
First Page
745
Last Page
758
ISSN
0167-4544
DOI
10.1007/s10551-019-04381-8
Keywords
family firms, moral capital, philanthropy, religion
Repository Citation
Maung, Min; Miller, Danny; Tang, Zhenyang; and Xu, Xiaowei, "Value-Enhancing Social Responsibility: Market Reaction to Donations by Family vs. Non-family Firms with Religious CEOs" (2020). School of Management. 156.
https://commons.clarku.edu/faculty_school_of_management/156