JEL Classification: G38; L31; M14; Q53
Keywords: corporate philanthropy, environmental regulation, pollution, regression disconti-nuity
학회소식
[2022년 5차 CAFM2022]Every emission you create–every dollar you’ll donate: The effect of regulation-induced pollution on corporate philanthropy
작성자 : 관리자
조회수 : 368
게시일 :
2022-12-20
We investigate the role of charitable giving as a form of reputation insurance by analyzing donations to nonprofits from philanthropic foundations of polluting firms. Exploiting the National Ambient Air Quality Standards as localized exogenous shocks to pollution, we find that firms with more pollution subsequently donate more to local nonprofits. Firms maximize the insurance value of donations by reallocating donations to areas where they pollute the most. Potential mechanisms include firms’ local media coverage, reputational risk exposure, and history of regulatory noncompliance. Welfare analysis suggests that firms underpay for the insurance value of corporate philanthropy at the cost of society.
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