How Does the Market React to Corporate Philanthropic Behavior? —evidence from the COVID-19 Pandemic Shock

Lu Jolly Zhou, Hua Qiu and Xinyu Zhang

Emerging Markets Finance and Trade, 2021, vol. 57, issue 6, 1613-1627

Abstract: Based on 1,130 listed Chinese firms’ charitable donation data during the COVID-19, this paper used the Event Study to examine market reactions to the epidemic and utilized OLS and Heckman two-stage models to investigate the impact of charitable donations on corporate market performance. Results show that greater corporate charitable material and medical donations result in more favorable short-term market reaction but weaker in the long term. Moreover, the low-leveraged, non-pharmaceutical, and non-SOEs can obtain better short-term performance through philanthropic donations. Findings suggest that the negative market sentiment from the COVID-19 cannot be offset by the short-term positive effects of corporate donations.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:57:y:2021:i:6:p:1613-1627

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DOI: 10.1080/1540496X.2021.1898367

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