Doing good right: building resilience through donations during the pandemic
International Journal of Operations & Production Management
ISSN: 0144-3577
Article publication date: 2 May 2023
Issue publication date: 2 January 2024
Abstract
Purpose
While researchers recognize the significance of philanthropic donations in disaster relief and recovery, the benefits that firms derive from such donations remain unclear, particularly when firms are adversely impacted by the disaster. To address this gap, this study seeks to elucidate the impact of various donation strategies on firm resilience in the context of the COVID-19 pandemic.
Design/methodology/approach
Based on the hand-collected data on donations, the authors employ ordinary least squares regressions to investigate the effectiveness of various donation strategies – including type, timing and location – in enhancing firm resilience in terms of the severity of stock price losses during the pandemic. To address potential endogeneity concerns, the authors use a two-stage least squares regression with instrumental variables.
Findings
This study finds robust evidence that certain donation strategies are more effective at mitigating stock price losses during the pandemic. Specifically, the authors find that in-kind donations (compared to monetary ones), earlier donations (compared to later ones) and donations targeting severely impacted areas (Hubei province vs. other places) are more effective methods to reduce the severity of stock price losses.
Originality/value
This study points out an alternative mechanism through which donations influence firm resilience during a crisis context and provides important managerial implications for firms to better engage in disaster donations.
Keywords
Acknowledgements
This research was supported by National Natural Science Foundation of China (Project Code: 71802039; 71832009). Yong acknowledges the funding for Research Institutes (Interdisciplinary Project Fund; Project Code: CD51), the funding for Projects of Strategic Importance of PolyU (Project Code: 1-ZE2D), the funding for OnlyOwner donation for research (Project Code: R-ZDDM), the funding for Research Centre for Blockchain Technology (Project Code: 1-CE05) and the support from the Center for Economic Sustainability and Entrepreneurial Finance (CESEF), PolyU.
Citation
Han, Z., Jiang, S., Zheng, Z. and Jin, Y. (2024), "Doing good right: building resilience through donations during the pandemic", International Journal of Operations & Production Management, Vol. 44 No. 1, pp. 32-53. https://doi.org/10.1108/IJOPM-03-2022-0211
Publisher
:Emerald Publishing Limited
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