Value-Enhancing Social Responsibility: Market Reaction to Donations by Family vs. Non-family Firms with Religious CEOs

Min Maung (), Danny Miller (), Zhenyang Tang () and Xiaowei Xu ()
Additional contact information
Min Maung: University of Saskatchewan
Danny Miller: HEC Montreal
Zhenyang Tang: Clark University
Xiaowei Xu: University of Rhode Island

Journal of Business Ethics, 2020, vol. 163, issue 4, No 9, 745-758

Abstract: 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.

Keywords: Family firms; Religion; Moral capital; Philanthropy (search for similar items in EconPapers)
JEL-codes: G14 M14 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (12)

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DOI: 10.1007/s10551-019-04381-8

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