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Why do some US manufacturing and service firms with international operations choose to give internationally whereas others opt to give only in the United States?

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  • Cowan, Adrian
  • Huang, Chia-Hsing
  • Padmanabhan, Prasad

Abstract

Although there have been many academic papers dealing with corporate social responsibility including charitable giving, many have focused on domestic giving. Very few papers have focused on foreign giving. We add to the emerging literature on foreign giving by examining separately the determinants of domestic vs. domestic and international giving for a sample of US manufacturing and service firms over the 2004–2010 period. Using a logit regression model, our findings show that firms with larger size and higher percentage of foreign sales tend to opt to give abroad for both manufacturing and service firms. In addition, manufacturing firms with higher debt to asset ratios tend to prefer giving only domestically. Service firms with higher return on assets or higher levels of free cash flow also tend to give internationally. These findings suggest that to some degree firms attempt to maximize the strategic value of foreign vs. domestic giving. Firms seem to treat corporate giving as a scarce strategic resource.

Suggested Citation

  • Cowan, Adrian & Huang, Chia-Hsing & Padmanabhan, Prasad, 2016. "Why do some US manufacturing and service firms with international operations choose to give internationally whereas others opt to give only in the United States?," International Business Review, Elsevier, vol. 25(1), pages 408-418.
    • Handle: RePEc:eee:iburev:v:25:y:2016:i:1:p:408-418
    DOI: 10.1016/j.ibusrev.2015.07.001
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