Using philanthropy as insurance

Using philanthropy as insurance - Jiao Luo, Aseem Kaul and Haram Seo

In the event of problematic events threatening their reputation, do corporate sponsors withstand the sanctions imposed by their stakeholders better than others? And does this result in better financial performance for these corporate sponsors than for others, due to the sympathy capital accumulated over the years?

In this 32nd episode, Arthur Gautier, professor at ESSEC and the ESSEC Philanthropy Chair holder, presents an article by Jiao Luo, Aseem Kaul and Haram Seo published in 2018 and entitled “Winning us with trifles: Adverse selection in the use of philanthropy as insurance”.

The authors look at corporate philanthropy in the US oil industry, and explore the extent to which the "price" that companies "pay" with their philanthropy leads to favorable or unfavorable consequences for the company itself, as well as for society.