Is it Inequity or Poverty Aversion?

Firms may allocate resources to the goal of reducing financial disparity (Camerer and Fehr, 2005; Fehr, Naef, and Schmidt, 2006). If this preference was stronger than restoring economic institutions, MNE philanthropy would be comparatively greater in countries with high levels of poverty where economic inequality is pervasive. To test this argument, we regressed an interaction of economic importance and poverty gap using the country poverty gap at $3.20 a day (2011 PPP) (as a percentage of population) from the WDI (see Anand and Sen, 2000 for a discussion on this variable). We found in Table 9 that MNEs with economic importance in the affected country donated in a lower magnitude to countries a greater poverty gap than to countries with a lower gap.