Introduction
Background
Literature Review
Determinants of Corporate Philanthropy
Corporate Social and Philanthropic Responses to Adversity
Hypothesis Development
Philanthropic Response from the Strategic Perspective
H1a: Corporate philanthropic response to the COVID-19 crisis increases with the severity of the local spread of the pandemic.
Philanthropic Response from the Cost Perspective
H1b: Corporate philanthropic response to COVID-19 decreases with the severity of the local spread of the pandemic.
Research Design
Sample Selection and Data
Regression Model and Main Variables
Descriptive Statistics
Variable | N | Mean | Std. Dev | Min | P25 | Median | P75 | Max |
---|---|---|---|---|---|---|---|---|
Panel A: Descriptive Statistics | ||||||||
Don_Dum | 176,645 | 0.005 | 0.072 | 0.000 | 0.000 | 0.000 | 0.000 | 1.000 |
Don_Amt | 176,645 | 0.033 | 0.456 | 0.000 | 0.000 | 0.000 | 0.000 | 8.732 |
Confirmed[−3,−1] | 176,645 | 2.675 | 1.954 | 0.000 | 0.693 | 2.708 | 4.248 | 8.256 |
Province | No. of observations in the full sample | Percentage (%) of observations in the full sample | No. of donation observations | Percentage (%) of donation observations |
---|---|---|---|---|
Panel B: Geographic Distribution of the Sample | ||||
Anhui | 4,949 | 2.802% | 30 | 3.240% |
Beijing | 19,061 | 10.791% | 102 | 11.015% |
Chongqing | 2,303 | 1.304% | 19 | 2.052% |
Fujian | 6,468 | 3.662% | 43 | 4.644% |
Gansu | 1,470 | 0.832% | 15 | 1.620% |
Guangdong | 29,351 | 16.616% | 147 | 15.875% |
Guangxi | 1,617 | 0.915% | 9 | 0.972% |
Guizhou | 1,372 | 0.777% | 17 | 1.836% |
Hebei | 2,646 | 1.498% | 22 | 2.376% |
Heilongjiang | 1,421 | 0.804% | 10 | 1.080% |
Henan | 3,871 | 2.191% | 23 | 2.484% |
Henan | 1,323 | 0.749% | 14 | 1.512% |
Hubei | 4,606 | 2.607% | 36 | 3.888% |
Hunan | 4,949 | 2.802% | 28 | 3.024% |
Inner Mongolia | 1,078 | 0.610% | 9 | 0.972% |
Jiangsu | 19,502 | 11.040% | 47 | 5.076% |
Jiangxi | 2,009 | 1.137% | 17 | 1.836% |
Jilin | 1,666 | 0.943% | 16 | 1.728% |
Liaoning | 3,381 | 1.914% | 20 | 2.160% |
Ningxia | 588 | 0.333% | 4 | 0.432% |
Qinghai | 441 | 0.250% | 2 | 0.216% |
Shaanxi | 2,401 | 1.359% | 11 | 1.188% |
Shandong | 9,457 | 5.354% | 61 | 6.587% |
Shanghai | 15,729 | 8.904% | 58 | 6.264% |
Shanxi | 1,617 | 0.915% | 11 | 1.188% |
Sichuan | 5,831 | 3.301% | 38 | 4.104% |
Tianjin | 2,058 | 1.165% | 10 | 1.080% |
Tibet | 686 | 0.388% | 2 | 0.216% |
Xinjiang | 2,597 | 1.470% | 15 | 1.620% |
Yunnan | 1,617 | 0.915% | 9 | 0.972% |
Zhejiang | 20,580 | 11.650% | 81 | 8.747% |
Main Results
Corporate Philanthropic Response to the Local Spread of COVID-19
(1) | (2) | ||
---|---|---|---|
Dep. Var. = | Don_Dum | Don_Amt | |
Confirmed[−3,−1] | − 0.001*** | − 0.004*** | |
(− 2.58) | (− 2.87) | ||
Constant | 0.007*** | 0.045*** | |
(10.76) | (10.88) | ||
Firm fixed effects | Yes | Yes | |
Date fixed effects | Yes | Yes | |
Obs | 176,645 | 176,645 | |
Adj. R2 | 0.010 | 0.011 |
Investor Reactions to COVID-19-Related Philanthropic Donations
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Dep. Var. = | CAR[0, + 2] | CAR[0, + 2] | CAR[0, + 2] | CAR[0, + 2] |
Don_Dum | − 0.010*** | 0.000 | ||
(− 2.96) | (0.04) | |||
Don_Dum × Confirm[−3,−1] | − 0.004** | |||
(− 2.19) | ||||
Don_Amt | − 0.002*** | − 0.001 | ||
(− 2.86) | (− 0.67) | |||
Don_Amt × Confirm[−3,−1] | − 0.000* | |||
(− 1.71) | ||||
Confirmed[−3,−1] | − 0.001*** | − 0.001*** | − 0.001*** | − 0.001*** |
(− 3.46) | (− 3.47) | (− 3.46) | (− 5.46) | |
Constant | − 0.001 | − 0.000 | − 0.001 | − 0.001* |
(− 1.18) | (− 0.70) | (− 1.18) | (− 1.83) | |
Firm fixed effects | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes |
Obs | 103,293 | 103,293 | 103,293 | 103,293 |
Adj. R2 | 0.094 | 0.080 | 0.094 | 0.094 |
Further Analyses on Organizational Variation in Philanthropic Decisions
Pre-existing Resource Availability and Corporate Philanthropic Response to COVID-19
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Dep. Var. = | Don_ Dum | Don_Amt | Don_Dum | Don_Amt |
Panel A | ||||
Confirmed[−3,−1] | − 0.001*** | − 0.005*** | − 0.001*** | − 0.006*** |
(− 2.86) | (− 3.20) | (− 3.22) | (− 3.64) | |
Confirmed[−3,−1] × Healthy | 0.002*** | 0.015*** | ||
(3.09) | (3.49) | |||
Confirmed[−3,−1] × HighCash | 0.002*** | 0.018*** | ||
(4.39) | (5.07) | |||
Constant | 0.007*** | 0.044*** | 0.007*** | 0.043*** |
(10.63) | (10.73) | (10.28) | (10.32) | |
Panel B | ||||
Confirmed[−3,−1]+ Confirmed[−3,−1] × Healthy | 0.001* | 0.011** | ||
F − Value | 3.69 | 4.98 | ||
Confirmed[−3,−1]+ Confirmed[−3,−1] × HighCash | 0.001*** | 0.012*** | ||
F − Value | 7.17 | 10.28 | ||
Firm fixed effects | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes |
Obs | 176,645 | 176,645 | 176,645 | 176,645 |
Adj. R2 | 0.010 | 0.011 | 0.011 | 0.011 |
Political Motive and Corporate Philanthropic Response to COVID-19
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Don_Dum | Don_Amt | Don_Dum | Don_Amt | |
Panel A | ||||
Confirmed[−3,−1] | − 0.001 | − 0.009* | − 0.001*** | − 0.006*** |
(− 1.33) | (− 1.72) | (− 3.77) | (− 4.01) | |
Confirmed[−3,−1] × PC | 0.001*** | 0.006*** | ||
(3.96) | (3.87) | |||
Confirmed[−3,−1] × SOE | − 0.002** | − 0.012* | ||
(− 2.26) | (− 1.76) | |||
Constant | 0.006*** | 0.037*** | 0.007*** | 0.046*** |
(17.56) | (17.63) | (11.00) | (11.12) | |
Panel B | ||||
Confirmed[−3,−1]+ Confirmed[−3,−1] × PC | 0.000 | − 0.000 | ||
F-Value | 0.01 | 0.05 | ||
Confirmed[−3,−1]+ Confirmed[−3,−1] × SOE | − 0.003*** | − 0.019*** | ||
F-Value | 12.85 | 12.22 | ||
Firm fixed effects | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes |
Obs | 176,645 | 176,645 | 176,645 | 176,645 |
Adj. R2 | 0.011 | 0.011 | 0.011 | 0.011 |
Reputational Motive and Corporate Philanthropic Response to COVID-19
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Don_Dum | Don_Amt | Don_Dum | Don_Amt | |
Panel A | ||||
Confirmed[−3,−1] | − 0.001*** | − 0.005*** | − 0.001*** | − 0.006*** |
(− 3.12) | (− 3.38) | (− 3.59) | (− 3.96) | |
Confirmed[−3,−1] × Medical | 0.003*** | 0.020*** | ||
(3.59) | (3.51) | |||
Confirmed[−3,−1] × Direct | 0.001*** | 0.009*** | ||
(4.41) | (4.65) | |||
Constant | 0.007*** | 0.044*** | 0.007*** | 0.043*** |
(10.70) | (10.82) | (10.40) | (10.49) | |
Panel B | ||||
Confirmed[−3,−1]+ Confirmed[−3,−1] × Medical | 0.002* | 0.015* | ||
F − Value | 2.74 | 2.71 | ||
Confirmed[−3,−1]+ Confirmed[−3,−1] × Direct | 0.000*** | 0.003** | ||
F − Value | 7.50 | 6.54 | ||
Firm fixed effects | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes |
Obs | 176,645 | 176,645 | 176,645 | 176,645 |
Adj. R2 | 0.011 | 0.011 | 0.011 | 0.011 |
Altruistic Motive and the Destinations of Philanthropy
(1) | (2) | |
---|---|---|
Don_Local | Don_Hubei | |
Confirmed[− 3, − 1] | − 0.001* | − 0.001*** |
(− 1.67) | (− 3.62) | |
Confirmed[− 3, − 1] × Healthy | 0.000* | 0.000 |
(1.75) | (1.32) | |
Confirmed[− 3, − 1 × Highcash | 0.001** | 0.001** |
(2.56) | (2.35) | |
Confirmed[− 3, − 1] × PC | 0.001** | 0.000* |
(2.48) | (1.86) | |
Confirmed[− 3, − 1] × SOE | − 0.001*** | − 0.000 |
(− 3.41) | (− 1.12) | |
Confirmed[− 3, − 1] × Direct | 0.001** | 0.000 |
(2.31) | (1.07) | |
Confirmed[− 3, − 1] × Medical | 0.002** | 0.001* |
(2.47) | (1.69) | |
Constant | 0.004*** | 0.003*** |
(5.89) | (6.43) | |
Date fixed effects | Yes | Yes |
Firm fixed effects | Yes | Yes |
Obs | 117,012 | 117,012 |
Adj. R2 | 0.005 | 0.008 |
(1) | (2) | |
---|---|---|
Dep. Var. = | CAR[0, + 2] | CAR[0, + 2] |
Don_Local | − 0.007* | − 0.004 |
(− 1.78) | (− 0.59) | |
Don_Hubei | − 0.022*** | 0.001 |
(− 3.86) | (0.08) | |
Don_Local × Confirm[−3,−1] | − 0.001 | |
(− 0.48) | ||
Don_Hubei × Confirm[−3,−1] | − 0.011*** | |
(− 2.91) | ||
Confirm[−3,−1] | − 0.002*** | − 0.001*** |
(− 5.62) | (− 5.60) | |
Constant | − 0.001* | − 0.001* |
(− 1.66) | (− 1.68) | |
Don_Local − Don_Hubei | 0.015** | |
F − Value | 4.55 | |
Don_Local × Confirm[−3,−1] − Don_ Hubei × Confirm[−3,−1] | 0.010** | |
F − Value | 4.48 | |
Firm fixed effects | Yes | Yes |
Date fixed effects | Yes | Yes |
Obs | 100,608 | 100,608 |
Adj. R2 | 0.093 | 0.093 |
Robustness Tests
Tests for Parallel Trends
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Don_Dum | Don_Amt | Don_Dum | Don_Amt | |
Confirmed[−3,−1] | − 0.000* | − 0.003* | − 0.001** | − 0.004** |
(− 1.69) | (− 1.80) | (− 2.15) | (− 2.37) | |
Confirmed[0] | − 0.000 | − 0.002 | − 0.000 | − 0.002 |
(− 0.96) | (− 0.88) | (− 1.14) | (− 1.04) | |
Confirmed[1,3] | − 0.000 | − 0.002 | ||
(− 0.57) | (− 0.92) | |||
Confirmed[1] | 0.000 | − 0.000 | ||
(0.03) | (− 0.00) | |||
Confirmed[2] | 0.000 | 0.002 | ||
(0.93) | (0.92) | |||
Confirmed[3] | − 0.000 | − 0.002 | ||
(− 0.59) | (− 0.82) | |||
Constant | 0.007*** | 0.048*** | 0.007*** | 0.046*** |
(8.94) | (9.27) | (8.47) | (8.75) | |
Firm fixed effects | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes |
Obs | 176,645 | 176,645 | 176,645 | 176,645 |
Adj. R2 | 0.010 | 0.011 | 0.010 | 0.011 |
Controlling the Effects of Prior Donations and Peer Pressure
(1) | (2) | (3) | (4) | (5) | (6) | |
---|---|---|---|---|---|---|
Don_Dum | Don_Dum | Don_Dum | Don_Amt | Don_Amt | Don_Amt | |
Confirmed[−3,−1] | − 0.001* | − 0.001*** | − 0.001*** | − 0.005*** | − 0.004*** | − 0.005*** |
(− 1.99) | (− 2.59) | (− 2.61) | (− 2.88) | (− 2.87) | (− 2.89) | |
Prior_Don | − 0.011*** | − 0.012*** | − 0.077*** | − 0.078*** | ||
(− 3.72) | (− 3.68) | (− 3.86) | (− 3.93) | |||
Peer_Don | 0.008*** | 0.008*** | 0.055*** | 0.056*** | ||
(5.92) | (5.98) | (6.17) | (6.23) | |||
Constant | 0.007*** | − 0.001 | − 0.000 | 0.046*** | − 0.006 | − 0.005 |
(8.38) | (− 0.41) | (− 0.35) | (10.99) | (− 0.66) | (− 0.60) | |
Firm fixed effects | Yes | Yes | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes | Yes | Yes |
Obs | 176,645 | 176,645 | 176,645 | 176,645 | 176,645 | 176,645 |
Adj. R2 | 0.011 | 0.011 | 0.011 | 0.011 | 0.011 | 0.012 |
Corporate Philanthropic Response Over Time
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
---|---|---|---|---|---|---|---|---|---|
Panel A: Using the Independent Variables in Different Windows with Don_Dum | |||||||||
Dep. Var. = | Don_Dum | ||||||||
Confirmed[-1] | − 0.000 | ||||||||
(− 1.13) | |||||||||
Confirmed[−2,−1] | − 0.001** | ||||||||
(− 2.12) | |||||||||
Confirmed[−3,−1] | − 0.000** | ||||||||
(− 2.06) | |||||||||
Confirmed[−4,−1] | − 0.000** | ||||||||
(− 2.09) | |||||||||
Confirmed[−5,−1] | − 0.000 | ||||||||
(− 1.46) | |||||||||
Confirmed[−7,−1] | − 0.000 | ||||||||
(− 0.04) | |||||||||
Confirmed[−10,−1] | 0.000 | ||||||||
(0.09) | |||||||||
Confirmed[−20,−1] | 0.000 | ||||||||
(0.37) | |||||||||
Confirmed[−30,−1] | − 0.000 | ||||||||
(− 0.30) | |||||||||
Constant | 0.006*** | 0.007*** | 0.007*** | 0.006*** | 0.006*** | 0.004*** | 0.003*** | 0.002* | 0.002 |
(12.04) | (10.47) | (10.03) | (9.44) | (8.16) | (5.72) | (4.27) | (1.72) | (0.58) | |
Firm fixed effects | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Obs | 173,040 | 169,435 | 165,830 | 162,225 | 158,620 | 151,410 | 140,595 | 104,545 | 68,495 |
Adj. R2 | 0.010 | 0.010 | 0.010 | 0.010 | 0.010 | 0.008 | 0.007 | 0.005 | 0.004 |
(1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | |
---|---|---|---|---|---|---|---|---|---|
Panel B: Using the Independent Variables in Different Windows with Don_Amt | |||||||||
Dep. Var. = | Don_Amt | ||||||||
Confirmed[−1] | − 0.002 | ||||||||
(− 1.43) | |||||||||
Confirmed[−2,−1] | − 0.004** | ||||||||
(− 2.45) | |||||||||
Confirmed[−3,−1] | − 0.004** | ||||||||
(− 2.33) | |||||||||
Confirmed[−4,−1] | − 0.003** | ||||||||
(− 2.33) | |||||||||
Confirmed[−5,−1] | − 0.002* | ||||||||
(− 1.69) | |||||||||
Confirmed[−7,−1] | − 0.000 | ||||||||
(− 0.23) | |||||||||
Confirmed[−10,−1] | − 0.000 | ||||||||
(− 0.02) | |||||||||
Confirmed[−20,−1] | 0.000 | ||||||||
(0.21) | |||||||||
Confirmed[−30,−1] | − 0.001 | ||||||||
(− 0.30) | |||||||||
Constant | 0.037*** | 0.043*** | 0.042*** | 0.041*** | 0.036*** | 0.025*** | 0.021*** | 0.011* | 0.014 |
(12.24) | (10.69) | (10.19) | (9.68) | (8.34) | (5.82) | (4.32) | (1.82) | (0.58) | |
Firm fixed effects | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Obs | 173,040 | 169,435 | 165,830 | 162,225 | 158,620 | 151,410 | 140,595 | 104,545 | 68,495 |
Adj. R2 | 0.010 | 0.010 | 0.010 | 0.010 | 0.010 | 0.008 | 0.007 | 0.006 | 0.004 |
Alternative Independent Variable and Sample
(1) | (2) | |
---|---|---|
Don_Dum | Don_Amt | |
Panel A: Replacing Confirmed[−3,−1] with Death[− 3,1] | ||
Death[−3,−1] | − 0.001* | − 0.007* |
(− 1.82) | (− 1.91) | |
Constant | 0.006*** | 0.035*** |
(28.87) | (28.25) | |
Firm fixed effects | Yes | Yes |
Date fixed effects | Yes | Yes |
Obs | 176,645 | 176,645 |
Adj. R2 | 0.010 | 0.011 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Excluding Hubei Province | Excluding Wuhan City | |||
Don_Dum | Don_Amt | Don_Dum | Don_Amt | |
Panel B: Excluding Firms Headquartered in Hubei Province/Wuhan City | ||||
Confirmed[−3,−1] | − 0.000* | − 0.003** | − 0.001** | − 0.004** |
(− 1.65) | (− 1.97) | (− 2.12) | (− 2.37) | |
Constant | 0.006*** | 0.040*** | 0.007*** | 0.042*** |
(10.49) | (10.66) | (10.57) | (10.77) | |
Firm fixed effects | Yes | Yes | Yes | Yes |
Date fixed effects | Yes | Yes | Yes | Yes |
Obs | 172,039 | 172,039 | 173,754 | 173,754 |
Adj. R2 | 0.010 | 0.011 | 0.010 | 0.011 |
(1) | (2) | |
---|---|---|
Panel C: Results Using a Cross-sectional Sample | ||
Don_Dum | Don_Amt | |
Confirm | − 0.020*** | − 0.048*** |
(− 3.19) | (− 2.91) | |
Size | 0.033*** | 0.098*** |
(6.11) | (6.82) | |
Lev | − 0.004 | − 0.018 |
(− 0.13) | (− 0.24) | |
Cash | 0.046 | 0.082 |
(0.80) | (0.58) | |
ROA | 0.004** | 0.010*** |
(2.40) | (2.58) | |
Growth | 0.000** | 0.001** |
(2.48) | (2.24) | |
Age | 0.002** | 0.006** |
(2.13) | (2.56) | |
SOE | − 0.050*** | − 0.134*** |
(− 3.52) | (− 3.65) | |
Constant | − 0.059 | 3.409*** |
(− 1.02) | (22.34) | |
Industry fixed effects | Yes | Yes |
Province fixed effects | Yes | Yes |
Obs | 3,496 | 3,496 |
Adj. R2 | 0.049 | 0.056 |