1. The effect of cause-related marketing on firm value: a look at Fortune's most admired all-stars
- Author
-
Woodroof, Parker J., Deitz, George D., Howie, Katharine M., and Evans, Robert D.
- Subjects
Fortune (Periodical) ,Corporate social responsibility -- Economic aspects ,Cause marketing -- Influence ,Value (Economics) -- Analysis ,Business enterprises -- Media coverage -- Economic aspects -- Social aspects ,Brand equity -- Analysis ,Advertising, marketing and public relations ,Business - Abstract
Companies are increasing their use of cause-related marketing as a means of communicating their commitment to corporate social responsibility while accomplishing their strategic goals. Although prior studies suggest that consumers react positively to cause-related marketing programs, understanding of their impact on financial performance remains limited. To address this gap, the authors employ an event study to examine the effects of cause-related marketing announcements on shareholder value using a sample of firms that appeared on Fortune's Most Admired All-Star list between 2005 and 2017. Study results show that announcement of these initiatives results in a significant loss of shareholder value. These losses are most pronounced for firms making monetary-only contributions, in comparison to those that make in-kind donations. In addition, the negative effects are mitigated for firms that have stronger reputations, have greater resource slack, and operate in more dynamic industries. Moreover, low-reputation and low-slack firms benefit most from in-kind contributions., Author(s): Parker J. Woodroof [sup.1] , George D. Deitz [sup.2] , Katharine M. Howie [sup.3] , Robert D. Jr Evans [sup.4] Author Affiliations: (Aff1) 0000 0001 2161 1001, grid.266128.9, University [...]
- Published
- 2019
- Full Text
- View/download PDF