Touched by Quakes: Mortality Salience and Corporate Philanthropy

Anqi Jiao, Honglin Ren and Ran Sun

Emerging Markets Finance and Trade, 2024, vol. 60, issue 14, 3371-3386

Abstract: This study examines how natural catastrophes affect corporate philanthropic activities in China. Firms located in areas experiencing severe seismic losses increase charitable donations. The effect is stronger when firms demonstrate stronger social responsibility, operate in higher-mortality regions, and are led by female or elder CEOs, supporting the mortality salience hypothesis. We address endogeneity issues with an instrumental variable and a propensity score matching approaches. Furthermore, firms with higher charitable donations experience a more positive stock market reaction around the 2008 Wenchuan Earthquake. Overall, our findings suggest that natural catastrophes amplify financial market participants’ mortality salience and affect their economic decisions.

Date: 2024
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DOI: 10.1080/1540496X.2024.2347402

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