Donations in the Dark

Ionela Andreicovici (), Nava Cohen (), Alessandro Ghio () and Luc Paugam ()
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Ionela Andreicovici: Frankfurt School of Finance & Management
Nava Cohen: New Jersey City University
Alessandro Ghio: ESCP Business School
Luc Paugam: HEC Paris

No 1510, HEC Research Papers Series from HEC Paris

Abstract: We examine the impact of the 2013 shift from mandatory to voluntary disclosure of corporate philanthropy in the United Kingdom (UK). Using a difference-indifferences approach over the period 2009-2017, we find that, relative to a sample of United States firms, UK firms (i) reduce corporate philanthropy disclosure and (ii) increase corporate philanthropic donations in the voluntary period. The increases in donations are more pronounced for firms with CEOs who have more connections to charities. Moreover, we find that in the voluntary period, UK firms that decrease corporate philanthropy disclosure increase donations and donate to more prestigious charities. Overall, our results point towards the idea that the shift to voluntary disclosure (i) reduces managerial incentives to transparently report corporate philanthropic activities and (ii) exacerbates managers' incentives to engage in self-serving corporate donations.

Keywords: corporate philanthropy; corporate social responsibility; disclosures; donations; regulation (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2024-03-13
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1510

DOI: 10.2139/ssrn.4743937

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