Is it the Pursuit of Market Standing?

A long-standing argument in the non-market literature is that corporations engage in philanthropy to increase their market performance. The strength of this motive is inversely proportional to market standing. Therefore, one expectation is that low-standing organizations should donate relatively large amounts because the marginal utility of such strategies is higher for them than for higher-standing firms (Eichholtz et al. 2010, Liang and Renneboog 2017, Muller and Kräussl 2011, Porter and Kramer 2002, Servaes and Tamayo 2013). To address this potential confounder, we proxied market standing by the rank of the MNE by firm revenue the year before the disruption. The coefficient of an interaction with economic importance indicates that the donations from economically connected MNEs fall with every standard-deviation decrease in market standing.