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Donations in the Dark

Author

Listed:
  • Andreicovici, Ionela

    (Frankfurt School of Finance & Management)

  • Cohen, Nava

    (New Jersey City University)

  • Ghio, Alessandro

    (ESCP Business School)

  • Paugam, Luc

    (HEC Paris)

Abstract

We examine the impact of the 2013 shift from mandatory to voluntary disclosure of corporate philanthropy in the United Kingdom (UK). Using a difference-indifferences approach over the period 2009-2017, we find that, relative to a sample of United States firms, UK firms (i) reduce corporate philanthropy disclosure and (ii) increase corporate philanthropic donations in the voluntary period. The increases in donations are more pronounced for firms with CEOs who have more connections to charities. Moreover, we find that in the voluntary period, UK firms that decrease corporate philanthropy disclosure increase donations and donate to more prestigious charities. Overall, our results point towards the idea that the shift to voluntary disclosure (i) reduces managerial incentives to transparently report corporate philanthropic activities and (ii) exacerbates managers' incentives to engage in self-serving corporate donations.

Suggested Citation

  • Andreicovici, Ionela & Cohen, Nava & Ghio, Alessandro & Paugam, Luc, 2024. "Donations in the Dark," HEC Research Papers Series 1510, HEC Paris.
    • Handle: RePEc:ebg:heccah:1510
    DOI: 10.2139/ssrn.4743937
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    More about this item

    Keywords

    corporate philanthropy; corporate social responsibility; disclosures; donations; regulation;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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