The Voice: The Shareholders' Motives Behind Corporate Donations during COVID-19 (former title: Selfish Shareholders: Corporate Donations during COVID-19)

Michele Fioretti (1) , Victor Saint-Jean (1) , Simon C Smith (2)

1 ECON - Département d'économie (Sciences Po)
2 Federal Reserve Board

What motivates shareholders to become prosocial activists? We exploit the onset of the COVID-19 pandemic as a natural experiment to study activism at S&P500 corporations. Prominent individual and family shareholders supported covid-related corporate donations to bolster their reputations as, for the public, they are synonymous with the donating firms. Image gains, instead, do not pass through to institutional shareholders; also, due to the sinking stock market, these shareholders preferred to donate themselves rather than support donations at the firms in their portfolios. Our results point to media attention as a critical channel to incentivize institutional shareholders to support prosocial decisions.

Keywords: Exit and voice; Shareholder activism; Social responsibility; Charitable donations; COVID-19

Domains: Economics and Finance

Michele Fioretti, Victor Saint-Jean, Simon C Smith. The Voice: The Shareholders' Motives Behind Corporate Donations during COVID-19 (former title: Selfish Shareholders: Corporate Donations during COVID-19). 2022. ⟨hal-03386585v2⟩